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The Effects of State Merit Aid Programs on Attendance at Elite Colleges

Author

Listed:
  • David L. Sjoquist

    (Georgia State University)

  • John V. Winters

    (Oklahoma State University)

Abstract

State merit aid programs have been found to reduce the likelihood that students attend college out-of-state. Using the U.S. News & World Report (USNWR) rankings of colleges and universities to measure college quality and Integrated Postsecondary Education Data System data to measure enrollment, we explore how this reduction in out-of-state enrollment differs by the academic quality of the institution. Our difference-in-differences results suggest that state merit aid programs do not induce students to forgo attending top 15 ranked schools. However, state merit aid does induce some students to forgo attending out-of-state schools ranked below the top 15 and shifts them toward lower quality in-state schools, so that the net effect is a reduction in academic quality, as measured by USNWR. These effects may have long-term implications for students’ degree completion rates and labor market earnings.

Suggested Citation

  • David L. Sjoquist & John V. Winters, 2016. "The Effects of State Merit Aid Programs on Attendance at Elite Colleges," Economics Working Paper Series 1610, Oklahoma State University, Department of Economics and Legal Studies in Business.
    • Handle: RePEc:okl:wpaper:1610
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    File URL: https://business.okstate.edu/site-files/docs/ecls-working-papers/OKSWPS1610.pdf
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    Cited by:

    1. Akanksha Negi & Digvijay S. Negi, 2025. "Difference‐in‐Differences With a Misclassified Treatment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 40(4), pages 411-423, June.
    2. Kelchen, Robert & Ortagus, Justin & Rosinger, Kelly & Cassell, Alex, 2022. "The effects of state performance funding policies on student loan debt," Economics of Education Review, Elsevier, vol. 91(C).
    3. Sano, Shinpei, 2019. "The effect of student loans on college enrollment: Evidence from municipality panel data in Japan," Japan and the World Economy, Elsevier, vol. 52(C).
    4. Youngwan Song & Ross Rubenstein, 2024. "How Does Reducing Merit-Aid Generosity and Certainty Affect College Choices? Evidence from Georgia’s HOPE Scholarship," Research in Higher Education, Springer;Association for Institutional Research, vol. 65(1), pages 1-41, February.
    5. Shimeng Liu & Weizeng Sun & John V. Winters, 2019. "Up In Stem, Down In Business: Changing College Major Decisions With The Great Recession," Contemporary Economic Policy, Western Economic Association International, vol. 37(3), pages 476-491, July.
    6. Yi Lu & Hong Song, 2020. "The effect of educational technology on college students’ labor market performance," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(3), pages 1101-1126, July.
    7. French, Robert & Oreopoulos, Philip, 2017. "Behavioral barriers transitioning to college," Labour Economics, Elsevier, vol. 47(C), pages 48-63.
    8. John V. Winters, 2020. "In-State College Enrollment and Later Life Location Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 55(4), pages 1400-1426.
    9. Haggag, Kareem & Patterson, Richard W. & Pope, Nolan G. & Feudo, Aaron, 2021. "Attribution bias in major decisions: Evidence from the United States Military Academy," Journal of Public Economics, Elsevier, vol. 200(C).
    10. Dennis A. Kramer & Justin C. Ortagus & T. Austin Lacy, 2018. "Tuition-Setting Authority and Broad-Based Merit Aid: The Effect of Policy Intersection on Pricing Strategies," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(4), pages 489-518, June.
    11. Christian Belzil & Jörgen Hansen & Julie Pernaudet, 2024. "Separating the Structural and Composition Impacts of Financial Aid on the Choice of Major," Working Papers 2024-14, Center for Research in Economics and Statistics.
    12. Wang, Jiaxin & Huang, Hongyan & Huang, Xiang & Sun, Di & Song, Zilong, 2024. "Returning from overseas: STEMs migration and corporate digitalization," International Review of Financial Analysis, Elsevier, vol. 91(C).
    13. Zachary Bleemer, 2022. "Affirmative Action, Mismatch, and Economic Mobility after California’s Proposition 209," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 115-160.
    14. Christian Belzil & Jörgen Hansen & Julie Pernaudet, 2025. "L’effet du coût des études supérieures sur les choix de filières stratégiques, scientifiques et mathématiques au Québec et au Canada," CIRANO Project Reports 2025rp-05, CIRANO.
    15. Bryan, Gharad & Chowdhury, Shyamal & Mobarak, Ahmed Mushfiq & Morten, Melanie & Smits, Joeri, 2021. "Encouragement and Distortionary Effects of Conditional Cash Transfers," IZA Discussion Papers 14326, Institute of Labor Economics (IZA).
    16. Braga, Breno & Malkova, Olga, 2020. "Hope for the Family: The Effects of College Costs on Maternal Labor Supply," IZA Discussion Papers 12958, Institute of Labor Economics (IZA).
    17. Han, Luyi & Winters, John V., 2020. "Industry Fluctuations and College Major Choices: Evidence from an Energy Boom and Bust," Economics of Education Review, Elsevier, vol. 77(C).
    18. Akanksha Negi & Digvijay S. Negi, 2024. "Difference-in-Differences with a Misclassified Treatment," Working Papers 121, Ashoka University, Department of Economics.

    More about this item

    Keywords

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    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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