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Upstream and Downstream Impacts of College Merit-Based Financial Aid for Low-Income Students: Ser Pilo Paga in Colombia

Author

Listed:
  • Juliana Londoño-Vélez
  • Catherine Rodríguez
  • Fabio Sánchez

Abstract

How does financial aid affect postsecondary enrollment, college choice, and student composition? We present new evidence based on a large-scale program available to high-achieving, low-income students for attending high-quality colleges in Colombia. RD estimates show financial aid eligibility raised immediate enrollment by 56.5 to 86.5 percent, depending on the complier population. This rise, driven by matriculation at private, high-quality colleges, closed the SES enrollment gap among high achievers. Moreover, a DID approach suggests enrollment of aid-ineligible students also improved because college supply expanded in response to heightened demand. With ability stratification largely replacing SES stratification, diversity increased 46 percent at private, high-quality colleges.

Suggested Citation

  • Juliana Londoño-Vélez & Catherine Rodríguez & Fabio Sánchez, 2020. "Upstream and Downstream Impacts of College Merit-Based Financial Aid for Low-Income Students: Ser Pilo Paga in Colombia," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 193-227, May.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:2:p:193-227
    DOI: 10.1257/pol.20180131
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    References listed on IDEAS

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    1. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust Nonparametric Confidence Intervals for Regression‐Discontinuity Designs," Econometrica, Econometric Society, vol. 82, pages 2295-2326, November.
    2. Sarah R. Cohodes & Joshua S. Goodman, 2014. "Merit Aid, College Quality, and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 251-285, October.
    3. Atila Abdulkadiroğlu & Parag A. Pathak & Christopher R. Walters, 2018. "Free to Choose: Can School Choice Reduce Student Achievement?," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 175-206, January.
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    5. Seth D. Zimmerman, 2019. "Elite Colleges and Upward Mobility to Top Jobs and Top Incomes," American Economic Review, American Economic Association, vol. 109(1), pages 1-47, January.
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    Cited by:

    1. Jose María Martínez & Victor Zuluaga & Alexander Buriticá, 2025. "Sweating Bullets: Heat, High-Stakes Evaluations, and The Role of Incentives," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(9), pages 2429-2467, September.
    2. Adriana Camacho & Catherine RodrÔøΩguez & Fabio Sanchez, 2022. "Does financial aid for top international graduate programs boost education and earnings? Evidence from Colombia," Documentos CEDE 20124, Universidad de los Andes, Facultad de Economía, CEDE.
    3. Bloem, Michael D. & Villero, Jesús, 2024. "College opportunity and teen fertility: Evidence from Ser Pilo Paga in Colombia," Journal of Development Economics, Elsevier, vol. 171(C).
    4. Laajaj, Rachid & Moya, Andrés & Sánchez, Fabio, 2022. "Equality of opportunity and human capital accumulation: Motivational effect of a nationwide scholarship in Colombia," Journal of Development Economics, Elsevier, vol. 154(C).
    5. German Pulido, 2025. "Assessing the Efficacy of Debt Forgiveness Incentives in Promoting Higher Education Outcomes: Evidence from Colombia's National Student Loan Company," CEPEO Working Paper Series 25-02, UCL Centre for Education Policy and Equalising Opportunities, revised Mar 2025.
    6. Posso, Christian & Saravia, Estefanía & Uribe, Pablo, 2023. "Acing the test: Educational effects of the SaberEs test preparation program in Colombia," Economics of Education Review, Elsevier, vol. 97(C).
    7. Ferreyra,Maria Marta & Garriga,Carlos & Martin,Juan David & Sanchez Diaz,Angelica Maria, 2020. "Raising College Access and Completion : How Much Can Free College Help ?," Policy Research Working Paper Series 9428, The World Bank.
    8. Juliana Jaramillo-Echeverri, 2024. "Movilidad social en la educación: el caso de la Universidad de los Andes en Colombia entre 1949 y 2018," Cuadernos de Historia Económica 61, Banco de la Republica de Colombia.
    9. Ferreyra, Maria Marta & Garriga, Carlos & Martin-Ocampo, Juan David & Sanchez-Diaz, Angelica Maria, 2024. "The limited impact of free college policies," European Economic Review, Elsevier, vol. 168(C).
    10. Cattaneo, Matias D. & Titiunik, Rocío & Yu, Ruiqi (Rae), 2026. "Estimation and inference in boundary discontinuity designs: Distance-based methods," Journal of Econometrics, Elsevier, vol. 256(PA).
    11. Diego Andrés Romero Viuche, 2025. "Impacto del programa Ser Pilo Paga en el acceso a la educación superior de los jóvenes rurales [Impact of the Ser Pilo Paga Program on Access to Higher Education for Rural Youth]," Documentos CEDE 2025-29, Universidad de los Andes, Facultad de Economía, CEDE.
    12. Londoño-Vélez, Juliana, 2022. "The impact of diversity on perceptions of income distribution and preferences for redistribution," Journal of Public Economics, Elsevier, vol. 214(C).
    13. Busso, Matías & Montaño, Sebastián & Muñoz-Morales, Juan S., 2023. "Signaling Specific Skills and the Labor Market of College Graduates," IDB Publications (Working Papers) 12720, Inter-American Development Bank.
    14. Li, Hongbin & Meng, Lingsheng & Mu, Kai & Wang, Shaoda, 2024. "English language requirement and educational inequality: Evidence from 16 million college applicants in China," Journal of Development Economics, Elsevier, vol. 168(C).

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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