Starting from 2005, Georgia saw a rapid decline in tertiary gross enrollment. This project outlines the potential reasons behind decreasing enrollment rates and discusses the role of institutional changes, wages, returns to education, external and international migration, and employment patterns. We expose the role of liquidity constraints in limiting access to higher education for the poorest segment of the Georgian population.

Further, we discuss possible ways to remedy the situation. We use data on poverty scores and beneficiary status of State Social Assistance Program of Georgia households from the Social Service Agency (SSA) and data on entrance examinations and allocation of scholarship from 2005 to 2013 from the National Examination Center (NAEC) and regression discontinuity methodology to examine the causal impact of social welfare payments on university enrollment. Given the success of unconditional cash transfers in boosting higher education enrolments, we recommend the government play a bigger role in facilitating access to higher education for Georgia's poor by introducing additional policy instruments in the form of need-based scholarships. Finally, we emphasize the need to develop high-quality vocational training centers that could supply high school graduates with much demanded technical skills and improve their bargaining position in the labor market.