V. Estimation Results (Parents Who Won't Pay: Expected Parental Contributions and Postsecondary Schooling‪)‬

One of the primary objectives of this paper is to determine what effect, if any, the EPC has on a child's postsecondary schooling outcomes, holding parental resources constant. The first outcome to be considered is the decision to enroll in postsecondary school. Table 2 presents the marginal effects of the EPC and other variables on the enrollment decision. The results indicate that changing the EPC, holding parental resources constant, has no effect on the decision to enroll. Note, however, that parents' having more income, being in a traditional family, and having a larger number of rooms, all possible family resource measures, have positive effects on postsecondary enrollment independent of the EPC. One possible explanation for these effects is that these variables are acting as proxies for parental tastes for education if wealthier parents have greater preferences for higher education than do less wealthy parents. Alternatively, the EPC calculated for wealthy parents may be so high as to surpass the cost of schooling or be so far removed from actual ability or willingness to pay that it is ineffective with respect to postsecondary education decisions. Several personal and family background variables are also significant determinants of postsecondary enrollment. Being Hispanic, Asian, or African-American leads to a greater probability of enrollment, perhaps due to the large number of scholarships targeted towards minority students. Higher standardized test scores and high school GPAs also lead to a higher probability of enrollment. A larger number of siblings leads to a lower probability of enrollment, perhaps due to the quantity versus quality tradeoff that parents' make with respect to transfers to children. However, a larger number of older siblings leads to a greater probability of enrollment, perhaps because older siblings do not rely on parental support and may even contribute funds toward their younger siblings' postsecondary educations.