The Bologna Process was introduced in the member states of the European Union in 1999 with the aim of creating a European Higher Education Area. The main component of the reform was the replacement of the existing national systems of higher education degrees with a homogeneous Bachelor-Master system. The idea was that the comparability of higher education degrees should improve student and labor force mobility, generate competition between universities and thus increase international competitiveness of the European system of higher education.

In certain countries, an additional political objective was to increase the number of higher education graduates and thereby address the lack of highskilled personnel. In many countries including Germany, the Bachelor degree can be obtained in a shorter period of time and is therefore less costly than the traditional national university degrees. This could encourage more students to invest in higher education and to finish their degrees. On the contrary, the returns to the new degrees are still uncertain. According to human capital theory, direct and indirect costs of studying are a major determinant of the decision to pursue tertiary education. It is therefore unclear whether the reform has an effect on college enrollment and drop-out rates.

Existing evidence on the impact of the Bologna reform on higher education enrollment and drop-out rates is limited. This is due to the fact that the reform has only been implemented very recently and that it was too early so far to measure its effects. In this paper, using administrative data on all German students from 1998 to 2006, we estimate the short-term effects of the implementation of the Bachelor degree on student enrollment and drop-out rates at the department level. We use differences in the timing of the implementation of the Bachelor degrees at the department level to identify the effects of the reform.

We find that the introduction of the Bachelor degree has no significant impact on enrollment or drop-out rates for most subjects. The reform therefore does not seem to have changed the incentives to pursue higher education at this stage. We do find significantly negative effects of the Bachelor implementation on enrollment for the subjects of electrical, mechanical and industrial engineering as well as for physics. We interpret this result as a possible sign of students avoiding the new degrees in these subjects because the traditional German engineering degrees have a very good reputation. If this is the case, the observed negative effect should eventually vanish as the traditional degrees are increasingly replaced by Bachelor programs. Hence, we should keep in mind that the effects of the reform on the number of first-year students as well as on drop-out rates may be different in the long-run, when all departments will have implemented the reform.

Keywords

Higher Education, College Enrollment, Drop-out, Bologna Process