The Determinants of Higher Education Participation in Ireland: A Micro Analysis

In this paper we present a theoretical model of higher education participation in Ireland. Utilising the Living in Ireland Survey data we model the impact of costs (direct and indirect), the estimated life cycle returns, environmental and parental influences and also household credit constraints on the higher education participation decision. We find that foregone earnings and youth employment rates have a negative impact on this decision; this suggests weaker labour markets for young people may have a positive impact on higher education participation. The insignificance of credit constraints in the shape of household income and maintenance grant eligibility from our estimations can also help draw some tentative policy conclusions. Our results also show that life cycle returns and parental educational level may influence participation in higher education in Ireland.

Participation in Higher Education: A Random Parameter Logit Approach with Policy Simulations

In this paper we present a theoretical model of higher education participation. We assume that young people that complete upper secondary education are faced with three choices, go to higher education, not go to higher education or go to higher education and work part time. Utilizing the Living in Ireland survey data 1994-2001 we model this choice in an Irish context by variation in costs (direct and indirect), the estimated lifecycle returns and household credit constraints. Using a random parameters logit choice model we find that simulated lifecycle earnings positively impact the educational/labour choices of young individuals in Ireland. This positive relationship is also found to be true for a choice-specific household income variable constructed in the paper. From the random parameters logit estimations we also find that preferences for choices with higher simulated lifecycle earnings and household income vary across individuals. We conduct policy simulations from our estimations and found that increasing student financial aid levels by 10% combined with a slight widening of the income limits for these aids can lead to significant movement away from the decision to not enter higher education.higher education participation, random parameters logit model, lifecycle simulated earnings, higher education policy

Utilising Microsimulation to Estimate New Marginal Returns to Education: Ireland 1987-2005

In this paper we utilise microsimulation techniques in the form of an income generation model and a tax/benefit model to estimate both the fiscal and net private return to education at a marginal level. This is carried out empirically using Irish data across the period 1987-2005 and is the first study to utilise these techniques in such a manner. The results indicate that a more generous tax/benefit system, combined with a greater state burden of the cost of education over this period may have helped increase the individual’s return to education, while reducing the state return from investing in education. The methodology employed allows us to specifically analyse the impact of various components of the tax/benefit system upon these returns across time and show the role of income tax changes upon the return to education for the individual and the state.returns to education, microsimulation, income generation model

Lifecycle Impact of Alternative Higher Education Finance Systems in Ireland

With increasing numbers of young people participating in higher education in Ireland and a heavy reliance of higher education institutions on state funding, the introduction of an alternative finance system for Ireland has been muted over the past number of years. However, no study has been conducted to gauge the potential impact of such measures. In this chapter we utilize a dynamic microsimulation model developed for Ireland to simulate the impact of both an income contingent loan system (ICL) and a graduate tax system from a fiscal and redistributional viewpoint and to analyze the repayment length under the former system. Our results suggest that an ICL system would is more equitable, while the graduate tax system would be a better alternative from a fiscal viewpoint. The results also illustrate the important of the interest rate attached to any future student loan system within Ireland from a fiscal viewpoint.graduate tax, income contingent loan, dynamic microsimulation, higher education financing

Utilising microsimulation to estimate new marginal returns to education: Ireland 1987-2005

In this paper we utilise microsimulation techniques in the form of an income generation model and a tax/benefit model to estimate both the fiscal and net private return to education at a marginal level. This is carried out empirically using Irish data across the period 1987-2005 and is the first study to utilise these techniques in such a manner. The results indicate that a more generous tax/benefit system, combined with a greater state burden of the cost of education over this period may have helped increase the individual's return to education, while reducing the state return from investing in education. The methodology employed allows us to specifically analyse the impact of various components of the tax/benefit system upon these returns across time and show the role of income tax changes upon the return to education for the individual and the state

Participation in higher education: a random parameter logit approach with policy simulations

In this paper we present a theoretical model of higher education participation. We assume that young people that complete upper secondary education are faced with three choices, go to higher education, not go to higher education or go to higher education and work part time. Utilizing the Living in Ireland survey data 1994-2001 we model this choice in an Irish context by variation in costs (direct and indirect), the estimated lifecycle returns and household credit constraints. Using a random parameters logit choice model we find that simulated lifecycle earnings positively impact the educational/labour choices of young individuals in Ireland. This positive relationship is also found to be true for a choice-specific household income variable constructed in the paper. From the random parameters logit estimations we also find that preferences for choices with higher simulated lifecycle earnings and household income vary across individuals. We conduct policy simulations from our estimations and found that increasing student financial aid levels by 10% combined with a slight widening of the income limits for these aids can lead to significant movement away from the decision to not enter higher education

Lifecycle impact of alternative higher education finance systems in Ireland

With increasing numbers of young people participating in higher education in Ireland and a heavy reliance of higher education institutions on state funding, the introduction of an alternative finance system for Ireland has been muted over the past number of years. However, no study has been conducted to gauge the potential impact of such measures. In this chapter we utilize a dynamic microsimulation model developed for Ireland to simulate the impact of both an income contingent loan system (ICL) and a graduate tax system from a fiscal and redistributional viewpoint and to analyze the repayment length under the former system. Our results suggest that an ICL system would is more equitable, while the graduate tax system would be a better alternative from a fiscal viewpoint. The results also illustrate the important of the interest rate attached to any future student loan system within Ireland from a fiscal viewpoint