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Testing Means-Tested Aid

Author

Listed:
  • Richard Murphy
  • Gill Wyness

Abstract

Inequalities do not end once students enter higher education. Yet, the majority of papers on the effectiveness of education aid examine its impact on college enrolment. In this paper, we provide evidence on the causal impact of means-tested financial aid on the outcomes of students who have already enrolled in college. To do so, we exploit a unique non-salient financial aid program which varies both across and within institutions, and for which eligibility is a highly non-linear function of parental income. Our findings suggest that increasing aid by £1,000 increases the chances of gaining a good degree by 3.7 percentage points.

Suggested Citation

  • Richard Murphy & Gill Wyness, 2016. "Testing Means-Tested Aid," CESifo Working Paper Series 6105, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6105
    as

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    References listed on IDEAS

    as
    1. Eric Bettinger & Oded Gurantz & Laura Kawano & Bruce Sacerdote, 2016. "The Long Run Impacts of Merit Aid: Evidence from California’s Cal Grant," NBER Working Papers 22347, National Bureau of Economic Research, Inc.
    2. Helena Skyt Nielsen & Torben Sørensen & Christopher Taber, 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," NBER Chapters,in: Income Taxation, Trans-Atlantic Public Economics Seminar (TAPES), pages 185-215 National Bureau of Economic Research, Inc.
    3. Neil S. Seftor & NSarah E. Turner, 2002. "Back to School: Federal Student Aid Policy and Adult College Enrollment," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 336-352.
    4. Thomas J. Kane, 1995. "Rising Public College Tuition and College Entry: How Well Do Public Subsidies Promote Access to College?," NBER Working Papers 5164, National Bureau of Economic Research, Inc.
    5. David E. Card & David S. Lee & Zhuan Pei & Andrea Weber, 2012. "Nonlinear Policy Rules and the Identification and Estimation of Causal Effects in a Generalized Regression Kink Design," NRN working papers 2012-14, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    6. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    7. Pietro Garibaldi & Francesco Giavazzi & Andrea Ichino & Enrico Rettore, 2012. "College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 699-711, August.
    8. Eric Bettinger, 2004. "How Financial Aid Affects Persistence," NBER Chapters,in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 207-238 National Bureau of Economic Research, Inc.
    9. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    10. repec:mpr:mprres:3250 is not listed on IDEAS
    11. Dong, Yingying, 2010. "Jumpy or Kinky? Regression Discontinuity without the Discontinuity," MPRA Paper 25461, University Library of Munich, Germany.
    12. Dearden, Lorraine & Fitzsimons, Emla & Wyness, Gill, 2014. "Money for nothing: Estimating the impact of student aid on participation in higher education," Economics of Education Review, Elsevier, vol. 43(C), pages 66-78.
    13. DesJardins, S. L. & Ahlburg, D. A. & McCall, B. P., 1999. "An event history model of student departure," Economics of Education Review, Elsevier, vol. 18(3), pages 375-390, June.
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    More about this item

    Keywords

    higher education; financial aid; degree completion;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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