Abstract: Contrary to tendencies to increase student participation in the financing of higher education, Estonia abolished student tuition fees in 2013. We study the effects of this reform on the extensive and intensive margin of student participation in higher education, concentrating mostly on increased access, admission, and graduation of rural and remote students. Extensive margin is operationalized by three metrics – probability of university admission, probability of admission to applied curricula, and probability of admission to prestigious curricula. Intensive margin is measured by the probability of graduation with nominal time. We confirm the tendency that high socioeconomic status increases the probability of being admitted to high-rank curricula and reduces the probability of choosing an applied curriculum. While the reform weakly improved rural student's tendency to graduate on time it diminished the probability that they get admitted to the high-rank curriculum. So contrary to reform intention and intuition – state-financing is not improving the equity in university admission.

Keywords: Regional disparity, Higher education financing, Regression discontinuity

Authors:

Kaire Põder (kaire.poder@ebs.ee) is a professor of Economics at the Estonian Business School. Her empirical research concentrates on education and labour economics, touching upon market efficiency and stability, while revealing its effect on the distribution of outcomes, e.g. equity.

Triin Lauri (triin.lauri@tlu.ee) is an associate professor of Public Policy at Tallinn University and running her postdoctoral project at University of Konstanz in 2020-2023. Her research concentrates on comparative welfare policies and educational inequalities.

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in both onsite and online format, unless announced otherwise. The presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Copies of the paper are usually made available at the seminar. The DEF seminar series is organised in collaboration with the project ”Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context” (IBEP), which has received funding from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Kadri Männasoo, kadri.mannasoo@taltech.ee.