Do tuition fees affect the mobility of university applicants? Evidence from a natural experiment

Several German states recently introduced tuition fees for university education. We investigate whether these tuition fees influence the mobility of university applicants. Based on administrative data of applicants for medical schools in Germany, we estimate the effect of tuition fees on the probability of applying for a university in the home state. We find a small but significant reaction: The probability of applying for a university in the home state falls by 2 percentage points (baseline: 69%) for high-school graduates who come from a state with tuition fees. Moreover, we find that students with better high-school grades react more strongly to tuition fees. This might have important effects on the composition of students across states.

► We investigate whether tuition fees that have recently been introduced in several German states influence the mobility of university applicants.
► Based on administrative data, we estimate the effect of tuition fees on the probability of applying for a university in the home state.
► We use the setting of this “Natural Experiment” for the estimation of the effect of tuition fees on the mobility of university applicants.
► We find a small but significant reaction: the probability of applying for a university in the home state falls by 2 percentage points (baseline: 69%) for high-school graduates who come from a state with tuition fees.