We estimate the elasticity of enrollment into higher education with respect to the amount of means tested student aid (BAfoeG) provided by the federal government using the German Socioeconomic Panel (SOEP). Potential student aid is derived on the basis of a detailed tax-benefit microsimulation...

During the postwar period German states pursued policies to increase the share of young Germans obtaining a university entrance diploma (Abitur) by building more academic track schools, but the timing of educational expansion differed between states. This creates exogenous variation in the...