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Merit Aid, College Quality and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy

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  • Cohodes, Sarah

    (Harvard University)

  • Goodman, Joshua

    (Harvard University)

Abstract

We analyze a Massachusetts merit aid program in which high-scoring students received tuition waivers at in-state public colleges with lower graduation rates than available alternative colleges. A regression discontinuity design comparing students just above and below the eligibility threshold finds that students are remarkably willing to forgo college quality for relatively little money and that marginal students lowered their college completion rates by using the scholarship. These results imply that college quality has a substantial impact on college completion rates and that students likely do not understand this fact well. The theoretical prediction that in-kind subsidies of public institutions can reduce consumption of the subsidized good is shown to be empirically important.

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Bibliographic Info

Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp13-005.

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Date of creation: Mar 2013
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Handle: RePEc:ecl:harjfk:rwp13-005

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Cited by:
  1. Cory Koedel & Peter Arcidiacono, 2012. "Race and College Success: Evidence from Missouri," Working Papers 1212, Department of Economics, University of Missouri, revised 15 Jul 2013.
  2. Joshua D. Angrist & Sarah R. Cohodes & Susan M. Dynarski & Parag A. Pathak & Christopher R. Walters, 2013. "Stand and Deliver: Effects of Boston's Charter High Schools on College Preparation, Entry, and Choice," NBER Working Papers 19275, National Bureau of Economic Research, Inc.
  3. Peter Arcidiacono & Cory Koedel, 2014. "Race and College Success: Evidence from Missouri," American Economic Journal: Applied Economics, American Economic Association, vol. 6(3), pages 20-57, July.
  4. Katja Maria Kaufmann & Matthias Messner & Alex Solis, 2013. "Returns to Elite Higher Education in the Marriage Market: Evidence from Chile," Working Papers 489, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  5. Rajashri Chakrabarti & Joydeep Roy, 2013. "Merit aid, student mobility, and the role of college selectivity," Staff Reports 641, Federal Reserve Bank of New York.

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