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How does aid matter? The effect of financial aid on university enrolment decisions

  • Loris Vergolini

    ()

    (IRVAPP, Research Institute for the Evaluation of Public Policies)

  • Nadir Zanini

    ()

    (IRVAPP, Research Institute for the Evaluation of Public Policies)

Using a counterfactual approach, this paper empirically investigates the impact of an educational programme recently introduced in the Province of Trento (North-East of Italy). The aim of the policy is to foster university enrolment of students from low-income families and to reduce inequalities in access to higher education. The programme, known as Grant 5B, consists in generous incentives: it targets the university students from low-income families and is awarded upon both merit and demonstrated financial need. We exploit data from an ad hoc survey conducted on a sample of upper secondary graduates and employ a regression discontinuity design to estimate the impact of the intervention on the university enrolment decisions. We find that the programme has no significant effect on enrolment rates, but it exerts a positive effect on redirecting students already bound for university to enrol outside the place of residence. Relying on the relative risk aversion theory, we explain why a relaxation of the eligibility rules based on merit might be more effective in reducing social inequalities in access to university.

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File URL: http://www.ieb.ub.edu/aplicacio/fitxers/2012/3/Doc2012-7.pdf
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Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2012/7.

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Length: 30 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:ieb:wpaper:2012/3/doc2012-7
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  16. Battistin, Erich & Rettore, Enrico, 2008. "Ineligibles and eligible non-participants as a double comparison group in regression-discontinuity designs," Journal of Econometrics, Elsevier, vol. 142(2), pages 715-730, February.
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  20. Dan Maurice Levy & Greg Duncan, 2000. "Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling," JCPR Working Papers 168, Northwestern University/University of Chicago Joint Center for Poverty Research.
  21. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 629-62, September.
  22. Fredriksson, Peter, 1997. " Economic Incentives and the Demand for Higher Education," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 129-42, March.
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