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Investing in Schooling in Chile: The Role of Information about Financial Aid for Higher Education

Author

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  • Taryn Dinkelman

    (Princeton University)

  • Claudia Mart�nez A.

    (Universidad de Chile)

Abstract

Recent economic research shows that imperfect information about Mincer returns to education (in developing countries) or about financial aid (in the US) may undermine investments in schooling and exacerbate inequalities in access to education. We extend this literature by presenting the results of an experiment that provided children and a subset of their parents with specific information about financial aid for higher education, and measured the impact on effort in primary school. We developed a DVD information program and randomly assigned a sample of Chilean 8th graders in poor urban schools to information treatment and control groups. Half of the treatment group watched the DVD at school (Student group) and the other half received a copy of the program to watch at home (Family group). Using survey and matched administrative data to measure outcomes three to six months post-intervention, we show that knowledge of financial aid sources improves in treated schools and school-reported absenteeism falls by 14%. These responses appear to be driven by students with higher baseline grades; yet we find no significant effects on 8th Grade scores or 9th Grade enrolment for any students. While parents in the Family treatment group score significantly higher on tests of information related to DVD content, watching the DVD at home is no more effective at changing effort than watching at school, at least for high ability students likely to select in to watching the DVD. Our results suggest that Chile falls somewhere between developing and developed countries: exposure to information about financial aid for post-secondary schooling significantly affects student knowledge and absenteeism, but is insufficient for improving other educational outcomes.

Suggested Citation

  • Taryn Dinkelman & Claudia Mart�nez A., 2011. "Investing in Schooling in Chile: The Role of Information about Financial Aid for Higher Education," Working Papers 1296, Princeton University, Department of Economics, Center for Economic Policy Studies..
  • Handle: RePEc:pri:cepsud:216dinkelman.pdf
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    Keywords

    finaicial aid; education; Chile; imperfect information; behavior; education investment;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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