Who Merits Financial Aid?: Massachusetts' Adams Scholarship
21 Pages Posted: 13 Mar 2007 Last revised: 24 Oct 2008
Date Written: May 1, 2008
Abstract
Most states now fund merit-based financial aid programs, the effects of which depend on how strongly students react to changes in college costs. I estimate such reactions using quasiexperimental aspects of a recent Massachusetts merit scholarship program intended to attract talented students to the state's public colleges. Despite its small monetary value, the Adams Scholarship induced 6% of winners to choose four-year public colleges instead of four-year private colleges, suggesting an elasticity of demand for public college enrollment above unity. Nonetheless, most funds flowed to students who would have enrolled in public colleges absent the scholarship and the aid had no effect on winners' overall college enrollment rate, which already exceeded 90%. Regression discontinuity estimates are larger than those from difference-in-difference specifications because winners with relatively low academic skill, and thus nearest the treatment threshold, reacted much more strongly to the price change than did highly skilled winners. Conditional on academic skill, low-income winners reacted similarly to their higher income peers, suggesting that previous research may have mistaken income heterogeneity for skill heterogeneity.
Keywords: financial aid, merit scholarships, college choice, regression discontinuity
JEL Classification: I20, I22, I28
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion
-
Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion
-
Hope for Whom? Financial Aid for the Middle Class and its Impact on College Attendance
-
By John Bound and Sarah E. Turner
-
The Effect of Veterans Benefits on Veterans' Education and Earnings
-
The Enrollment Effects of Merit-Based Financial Aid: Evidence from Georgia's Hope Scholarship
By Christopher Cornwell, David B. Mustard, ...
-
A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going