Description:
We use the recent introduction of tuition fees at public universities in seven of the sixteen German states to identify the effects of tuition fees on university enrollment of first-year students at German public universities. Our study differs from previous research in two important ways. Firstly, we take into account the location of universities and include a spatial variable, which measures the distance between a fee-imposing university and the nearest fee-free alternative. Secondly, we use panel data that allows us to control for unobserved heterogeneity between universities. Our results suggest that enrollment at universities that impose a tuition fee and that are located close to fee-free universities experience a decrease in enrollment that is twice as large as the decrease at universities that are further away from fee-free universities. We also find gender differences in enrollment behavior. Enrollment numbers of female students at universities that are located far away from fee-free alternatives are significantly less affected by the introduction of tuition fees than are enrollment numbers of male students.