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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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    References listed on IDEAS

    as
    1. David L. Sjoquist & John V. Winters, 2015. "State Merit-Based Financial Aid Programs And College Attainment," Journal of Regional Science, Wiley Blackwell, vol. 55(3), pages 364-390, June.
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    6. Long, Mark C., 2008. "College quality and early adult outcomes," Economics of Education Review, Elsevier, vol. 27(5), pages 588-602, October.
    7. Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1491-1527.
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    9. Curs, Bradley & Singell, Larry Jr., 2002. "An analysis of the application and enrollment processes for in-state and out-of-state students at a large public university," Economics of Education Review, Elsevier, vol. 21(2), pages 111-124, April.
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    Cited by:

    1. 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.
    2. repec:eee:labeco:v:47:y:2017:i:c:p:48-63 is not listed on IDEAS
    3. John V. Winters, 2016. "In-State College Enrollment and Later Life Location Decisions," Economics Working Paper Series 1702, Oklahoma State University, Department of Economics and Legal Studies in Business.
    4. repec:spr:reihed:v:59:y:2018:i:4:d:10.1007_s11162-017-9475-x is not listed on IDEAS

    More about this item

    Keywords

    merit aid; college choice; college quality; elite colleges;

    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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