Who merits financial aid?: Massachusetts' Adams Scholarship
AbstractMost 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 quasi-experimental 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.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 92 (2008)
Issue (Month): 10-11 (October)
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Web page: http://www.elsevier.com/locate/inca/505578
Financial aid Merit scholarships College costs Difference-in-difference Regression discontinuity;
Other versions of this item:
- Joshua Goodman, 2007. "Who merits financial aid? Massachusetts? Adams scholarship," Discussion Papers 0607-13, Columbia University, Department of Economics.
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- Cohodes, Sarah & Goodman, Joshua, 2013. "Merit Aid, College Quality and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," Working Paper Series rwp13-005, Harvard University, John F. Kennedy School of Government.
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