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The effect of grants on university drop-out rates: evidence on the Italian case

Author

Listed:
  • Francesca Modena

    (Bank of Italy)

  • Giulia Martina Tanzi

    (Bank of Italy)

  • Enrico Rettore

    (University of Trento, Department of Sociology and Social Research and FBK-IRVAPP)

Abstract

In this paper we measure the impact of need-based grants on university dropout rates in the first year, using student-level data from all Italian universities in the period 2003-2013. In Italy, some of the students eligible for grants do not receive them due to a lack of funds. We exploit this phenomenon to identify the causal effect of financial assistance. We find that need-based aid prevents students belonging to low-income families from dropping out from higher education; the estimated effect is sizeable. This evidence is robust to a variety of specifications and sample selection criteria.

Suggested Citation

  • Francesca Modena & Giulia Martina Tanzi & Enrico Rettore, 2018. "The effect of grants on university drop-out rates: evidence on the Italian case," Temi di discussione (Economic working papers) 1193, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1193_18
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    Cited by:

    1. Modena, Francesca & Rettore, Enrico & Tanzi, Giulia, 2021. "Does Gender Matter? The Effect of High Performing Peers on Academic Performances," IZA Discussion Papers 14806, Institute of Labor Economics (IZA).
    2. Olivier Coibion & Yuriy Gorodnichenko & Tiziano Ropele, 2020. "Inflation Expectations and Firm Decisions: New Causal Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 165-219.
    3. Alberto Martini & Davide Azzolini & Barbara Romano & Loris Vergolini, 2021. "Increasing College Going by Incentivizing Savings: Evidence from a Randomized Controlled Trial in Italy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 40(3), pages 814-840, June.
    4. Fabrizio Ferriani & Filippo Natoli & Giovanni Veronese & Federica Zeni, 2019. "Risk premium in the era of shale oil," Temi di discussione (Economic working papers) 1215, Bank of Italy, Economic Research and International Relations Area.
    5. Berlingieri, Francesco & Diegmann, André & Sprietsma, Maresa, 2023. "Preferred field of study and academic performance," Economics of Education Review, Elsevier, vol. 95(C).
    6. Minaya, Veronica & Agasisti, Tommaso & Bratti, Massimiliano, 2022. "When need meets merit: The effect of increasing merit requirements in need-based student aid," European Economic Review, Elsevier, vol. 146(C).
    7. Delogu, Marco & Lagravinese, Raffaele & Paolini, Dimitri & Resce, Giuliano, 2024. "Predicting dropout from higher education: Evidence from Italy," Economic Modelling, Elsevier, vol. 130(C).
    8. Michele Loberto, 2019. "Safety traps, liquidity and information-sensitive assets," Temi di discussione (Economic working papers) 1216, Bank of Italy, Economic Research and International Relations Area.
    9. Francesca Modena & Giulia Martina Tanzi & Santiago Pereda Fernandez, 2020. "On the design of grant assignment rules," Temi di discussione (Economic working papers) 1307, Bank of Italy, Economic Research and International Relations Area.
    10. Modena, Francesca & Rettore, Enrico & Tanzi, Giulia Martina, 2022. "Asymmetries in the gender effect of high-performing peers: Evidence from tertiary education," Labour Economics, Elsevier, vol. 78(C).
    11. Giuseppe Ferrero & Andrea Nobili & Gabriele Sene, 2019. "Credit risk-taking and maturity mismatch: the role of the yield curve," Temi di discussione (Economic working papers) 1220, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    human capital; higher education; university dropout; student financial aid; treatment effect model; Italy;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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