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On Money and Motivation: A Quasi-Experimental Analysis of Financial Incentives for College Achievement

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  • Judith Scott-Clayton
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    Abstract

    Programs linking college aid to academic achievement could work either by lowering the cost of college or by inducing additional student effort. I examine the PROMISE program in West Virginia, which offers free tuition to students who maintain a minimum GPA and course load. Using administrative data, I exploit discontinuities in the eligibility formula and the timing of implementation to estimate causal effects. I find robust and significant impacts on key academic outcomes. Impacts are concentrated around the annual requirements for scholarship renewal, suggesting that the program works via incentives for academic achievement, not simply by relaxing financial constraints.

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    File URL: http://jhr.uwpress.org/cgi/reprint/46/3/614
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    Bibliographic Info

    Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

    Volume (Year): 46 (2011)
    Issue (Month): 3 ()
    Pages: 614-646

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    Handle: RePEc:uwp:jhriss:v:46:y:2011:iii:1:p:614-646

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    Web page: http://jhr.uwpress.org/

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    Cited by:
    1. Maria D. Fitzpatrick & Damon Jones, 2012. "Higher Education, Merit-Based Scholarships and Post-Baccalaureate Migration," NBER Working Papers 18530, National Bureau of Economic Research, Inc.
    2. Rajashri Chakrabarti & Joydeep Roy, 2013. "Merit aid, student mobility, and the role of college selectivity," Staff Reports 641, Federal Reserve Bank of New York.
    3. Robert Bifulco & Jason M. Fletcher & Sun Jung Oh & Stephen L. Ross, 2012. "Do Classmate Effects Fade Out?," NBER Working Papers 18648, National Bureau of Economic Research, Inc.
    4. Sjoquist, David L. & Winters, John V., 2013. "State Merit-Aid Programs and College Major: A Focus on STEM," IZA Discussion Papers 7381, Institute for the Study of Labor (IZA).

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