Does distance matter? Tuition fees and enrollment of first-year students at German public universities⇤

We use the recent introduction of tuition fees at public universities in seven of the sixteen German states to identify the effects of tuition fees on university enrollment of first-year students at German public universities. Our study differs from previous research in two important ways. Firstly, we take into account the location of universities and include a spatial variable, which measures the distance between a fee-imposing university and the nearest fee-free alternative. Secondly, we use panel data that allows us to control for unobserved heterogeneity between universities. Our results suggest that enrollment at universities that impose a tuition fee and that are located close to fee-free universities experience a decrease in enrollment that is twice as large as the decrease at universities that are further away from fee-free universities. We also find gender differences in enrollment behavior. Enrollment numbers of female students at universities that are located far away from feefree alternatives are significantly less affected by the introduction of tuition fees than are enrollment numbers of male students. JEL classification: I22, I23, H75