How did the latest increase in fees in England affect student enrolment and inequality?

Abstract

This paper presents a first analysis of the increase of undergraduate tuition fees to £9,000 (€11.000) in English higher education in 2012. I use a semi-experimental research design to estimate the effect of the reforms, based on student enrolment data drawn from the Higher Education Statistics Agency (HESA). Taking into account possible anticipation effects of the fee increase, I find that enrolment declined by 15 % in the treated groups as a result of the tuition fee increase. This number is almost three times higher than what previous studies have found, and may represent a serious long term cost for the English economy. The decline in enrolments is particularly pronounced for students in older age groups and students from the service class and the middle class. No effect is visible for students from the working class, indicating that the reforms did not lead to a much-feared increase in class bias in higher education enrolment. The reforms also seem not to have exacerbated ethnic inequality in higher education, as all ethnic groups were negatively affected by the reforms. These results are consistent with earlier research in the United States and the United Kingdom, although they expand our understanding of student price responsiveness in other important ways. The paper argues that younger and older students face different costs and benefits. Older students may be less certain about their benefits, and therefore be more sensitive towards price increases. The strong decrease in mature learners may require a policy response, taking into account these differing incentives.