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Financial Aid and Higher Education Enrollment in Chile: A Government Policy Analysis

  • Meneses, Francisco
  • Blanco, Christian

This paper evaluates the impact of the Chilean government's nancial aid on college and vocational education enrollment. We found that there is an endogenous process in the application for nancial aid. To solve this problem we use a two-step procedure with instrumental variables (IV) and found that nancial aid increases the probability of students going to college by over 30%. In the case of vocational education, we found that being pre-selected for college nancial aid decreases the enrollment. However, vocational nancial aid increases that probability of enrollment. Therefore, students choose college education over vocational education when they have nancial aid for both. Theoretical conclusion and public policy recommendations are provided.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23321.

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Date of creation: 09 Jun 2010
Date of revision:
Handle: RePEc:pra:mprapa:23321
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  1. David M. Linsenmeier & Harvey S. Rosen & Cecilia Elena Rouse, 2006. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 126-145, February.
  2. Singell, Larry D, Jr & Stone, Joe A, 2002. "The Good, the Poor and the Wealthy: Who Responds Most to College Financial Aid?," Bulletin of Economic Research, Wiley Blackwell, vol. 54(4), pages 393-407, October.
  3. Dynarski, Susan, 2004. "The New Merit Aid," Working Paper Series rwp04-009, Harvard University, John F. Kennedy School of Government.
    • Susan Dynarski, 2004. "The New Merit Aid," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 63-100 National Bureau of Economic Research, Inc.
  4. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post-Secondary Schooling," NBER Working Papers 9055, National Bureau of Economic Research, Inc.
  5. Thomas J. Kane, 2003. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going," NBER Working Papers 9703, National Bureau of Economic Research, Inc.
  6. David Deming & Susan Dynarski, 2009. "Into College, Out of Poverty? Policies to Increase the Postsecondary Attainment of the Poor," NBER Working Papers 15387, National Bureau of Economic Research, Inc.
  7. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
  8. Monks, James, 2009. "The impact of merit-based financial aid on college enrollment: A field experiment," Economics of Education Review, Elsevier, vol. 28(1), pages 99-106, February.
  9. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
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