Thanks Martin 🙂

Thanks Moritz!

Thanks for reading - find the full paper on my website, feedback and comments are most welcome!

👉 carlgergs.com

(7/7)

❗️Individual level responses to the policy translated to unintended consequences at the aggregate level

🎓 Access to university was narrowed for low-income students of all abilities

📖 Overall supply of teachers contracted during a time when pupil numbers were expanding

(6/7)

What drove this response?

🫰(Sunk) Costs - Increasing concern with study cost and desire to explore different career options before making a final commitment

💰 Debt - Heightened concerns with being financially (in)dependent following the move to a full-loan policy

(5/7)

📉 Reform reduced enrolment rates amongst funding eligible pupils substantially

👩‍🏭👩‍💼 Pupils re-allocated into apprenticeship training instead

👩‍🏫🧑‍🏫 Enrolment contraction particularly pronounced in teacher training & less so in subjects promising higher labour market returns

(4/7)

❗️We find human capital investments of low-income students to be highly cost-sensitive, despite favourable loan conditions

💵 Loans were interest-free and income-contingent repayment plans effectively insured individuals against adverse labour market outcomes

(3/7)

The paper - w/ @barbaraboelmann.bsky.social
@fpeter.bsky.social & H Spangenberg - leverages

⚙️ Rich survey data yet to be used by econ literature
💡 A unique historical setting

1983 - 🇩🇪 moved from offering means-tested student finance as a mix of a grant & loan to exclusively a loan (2/7)