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

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  • 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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    File URL: http://doi.org/10.3886/E109704V1
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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.
    4. David S. Lee, 2009. "Training, Wages, and Sample Selection: Estimating Sharp Bounds on Treatment Effects," Review of Economic Studies, Oxford University Press, vol. 76(3), pages 1071-1102.
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    Cited by:

    1. Maria Marta Ferreyra & Carlos Garriga & Juan D. Martin-Ocampo & Angélica María Sánchez Díaz, 2021. "Raising College Access and Completion: How Much Can Free College Help?," Borradores de Economia 1155, Banco de la Republica de Colombia.

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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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