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Do public scholarships crowd out parental transfers? Evidence from France

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Abstract

This paper investigates the extent to which means-tested scholarships received by higher education students in France crowd out parental financial support. We estimate a private transfer function using survey data completed in 2014 on a sample of students aged between 18 and 24. When introducing the amount of public scholarship as exogenous covariate, we find that one additional euro of scholarship is associated with a decrease in private transfers of 0.40-0.50 euros. We also consider an instrumental variable strategy which exploits the non-linear schedule of the scholarship amount and find a larger effect with a decrease of 0.50-0.65 euros. Overall, our results suggest that a substantial part of student scholarship benefits low-income parents through a reduction in the money they give to their student children

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  • Sébastien Grobon & François-Charles Wolff, 2022. "Do public scholarships crowd out parental transfers? Evidence from France," Documents de travail du Centre d'Economie de la Sorbonne 22009, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:22009
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    More about this item

    Keywords

    public scholarship; students; parental transfers; crowding-out effect; altruism;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • I2 - Health, Education, and Welfare - - Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • D10 - Microeconomics - - Household Behavior - - - General

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