Canada's universities each receive an annual operating grant from their provincial government to partially finance operating expenses. This paper estimates the sensitivity of provincial operating grants to the business cycle by disentangling the effects of procyclical income on government...

We specify and estimate a demand equation for university education in Canada that is a function of tuition fees, real disposable income per capita and other variables that capture a student’s opportunity cost. Our model has a number of novel features. We utilize application data, rather than...