IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp18547.html

Levelling up? The Role of Need and Merit Based University Grants in Non-Selective Higher Education

Author

Listed:
  • Sonedda, Daniela

    (University of Insubria)

  • Matranga, Marcello

    (University of Piemonte Orientale)

  • Vernasca, Gianluigi

    (University of Essex)

  • Rossi, Mariacristina

    (University of Turin)

  • Figari, Francesco

    (University of Piemonte Orientale)

Abstract

We study the interaction between need- and merit-based university grants in a non-selective higher education system. Using administrative data from a northern Italian university, we analyse how eligibility criteria affect enrolment, academic performance, and labour market outcomes. We document a trade-off between the two criteria, with merit requirements acting as endogenous screening. We rationalise this trade-off with a three-period model predicting that merit thresholds increase effort among students with higher expected ability but may discourage effort among students at risk of falling short, as losing the grant reduces expected utility. We support these predictions using a difference-in-differences estimator for multiple treatments, separately analysing students switching into and out of need- and merit-based eligibility. Our results show that grants target disadvantaged but academically strong students, generate perverse incentive effects that vary by gender, and fail to retain a substantial share of initial recipients.

Suggested Citation

  • Sonedda, Daniela & Matranga, Marcello & Vernasca, Gianluigi & Rossi, Mariacristina & Figari, Francesco, 2026. "Levelling up? The Role of Need and Merit Based University Grants in Non-Selective Higher Education," IZA Discussion Papers 18547, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18547
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp18547.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp18547. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.