Who Has the Time? Community College Students’ Time-Use Response to Financial Incentives

Abstract

We evaluate the effect of performance-based scholarship programs for postsecondary students on student time use and effort and whether these effects are different for students we hypothesize may be more or less responsive to incentives. To do so, we administered a time-use survey as part of a randomized experiment in which community college students in New York City were randomly assigned to be eligible for a performance-based scholarship or to a control group that was only eligible for the standard financial aid. This paper contributes to the literature by attempting to get inside the “black box” of how students respond to a monetary incentive to improve their educational attainment. We find that students eligible for a scholarship devoted more time to educational activities, increased the quality of effort toward and engagement with their studies, and allocated less time to leisure. Additional analyses suggest that students who were plausibly more myopic—place less weight on future benefits—were more responsive to the incentives, but we find no evidence that students who are arguably more time constrained were less responsive to the incentives.

Keywords: higher education, educational investment, time use, incentives, financial aid

JEL Classification: J24, D03, I2