IDEAS home Printed from https://ideas.repec.org/p/qed/wpaper/1373.html
   My bibliography  Save this paper

Student Aid And The Distribution Of Educational Attainment

Author

Listed:
  • Maggie Jones

    (Department of Economics, University of Victoria)

Abstract

This paper uses cutbacks to a post-secondary funding program for Indigenous people in Canada to understand how marginalized populations respond to increases in the costs of higher education. I exploit between-cohort and cross-eligibility variation in exposure to student aid to show that increasing the costs of post-secondary education not only affects post-secondary attainment but also leads to a sizeable decrease in high school graduation rates. This result is in line with a theoretical model that embeds the expected costs of higher education in the high school decision. The model predicts that high school graduation is affected by the cost of higher education in environments where students face low labour market returns to completing high school. I show that after reductions in targeted student aid in the late 1980s, high school graduation rates declined by four percentage points on Indian reserves, where the return to a high school degree is low, relative to a control group. Post-secondary attainment also responded to changes in the availability of student aid, although the exact magnitudes and levels of post- secondary education affected vary across genders. I estimate that the cutbacks to student aid explain approximately 10 percent of the contemporary difference in hours worked between Indigenous and non-Indigenous people in Canada.

Suggested Citation

  • Maggie Jones, 2017. "Student Aid And The Distribution Of Educational Attainment," Working Paper 1373, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1373
    as

    Download full text from publisher

    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1373.pdf
    File Function: First version 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    2. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    3. Turner, Sarah & Bound, John, 2003. "Closing the Gap or Widening the Divide: The Effects of the G.I. Bill and World War II on the Educational Outcomes of Black Americans," The Journal of Economic History, Cambridge University Press, vol. 63(1), pages 145-177, March.
    4. repec:fth:prinin:464a is not listed on IDEAS
    5. Wang, Jin, 2013. "The economic impact of Special Economic Zones: Evidence from Chinese municipalities," Journal of Development Economics, Elsevier, vol. 101(C), pages 133-147.
    6. Katharine G. Abraham & Melissa A. Clark, 2006. "Financial Aid and Students’ College Decisions: Evidence from the District of Columbia Tuition Assistance Grant Program," Journal of Human Resources, University of Wisconsin Press, vol. 41(3).
    7. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    8. Alan B. Krueger, 2002. "Inequality, Too Much of a Good Thing," Working Papers 845, Princeton University, Department of Economics, Industrial Relations Section..
    9. Donna Feir, 2013. "Size, Structure, and Change: Exploring the Sources of Aboriginal Earnings Gaps in 1995 and 2005," Canadian Public Policy, University of Toronto Press, vol. 39(2), pages 309-334, June.
    10. John Bound & Sarah Turner, 2002. "Going to War and Going to College: Did World War II and the G.I. Bill Increase Educational Attainment for Returning Veterans?," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 784-815, October.
    11. repec:pri:cepsud:87krueger is not listed on IDEAS
    12. 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.
    13. Alan Krueger, 2002. "Inequality, Too Much of a Good Thing," Working Papers 845, Princeton University, Department of Economics, Industrial Relations Section..
    14. Joshua D. Angrist, 1993. "The Effect of Veterans Benefits on Education and Earnings," ILR Review, Cornell University, ILR School, vol. 46(4), pages 637-652, July.
    15. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    16. Helena Skyt Nielsen & Torben Sørensen & Christopher Taber, 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," NBER Chapters, in: Income Taxation, Trans-Atlantic Public Economics Seminar (TAPES), pages 185-215, National Bureau of Economic Research, Inc.
    17. Alan B. Krueger, 2002. "Inequality, Too Much of a Good Thing," Working Papers 845, Princeton University, Department of Economics, Industrial Relations Section..
    18. Peter George & Peter Kuhn, 1994. "The Size and Structure of Native-White Wage Differentials in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 20-42, February.
    19. Brahim Boudarbat & Thomas Lemieux & W. Craig Riddell, 2010. "The Evolution of the Returns to Human Capital in Canada, 1980-2005," Canadian Public Policy, University of Toronto Press, vol. 36(1), pages 63-89, March.
    20. Peter Arcidiacono, 2005. "Affirmative Action in Higher Education: How Do Admission and Financial Aid Rules Affect Future Earnings?," Econometrica, Econometric Society, vol. 73(5), pages 1477-1524, September.
    21. repec:fth:prinin:466 is not listed on IDEAS
    22. Philip Oreopoulos & Reuben Ford, 2019. "Keeping College Options Open: A Field Experiment to Help all High School Seniors Through the College Application Process," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(2), pages 426-454, March.
    23. Philip Oreopoulos & Uros Petronijevic, 2013. "Making College Worth It: A Review of Research on the Returns to Higher Education," NBER Working Papers 19053, National Bureau of Economic Research, Inc.
    24. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    25. Susan Dynarski, 2002. "The Behavioral and Distributional Implications of Aid for College," American Economic Review, American Economic Association, vol. 92(2), pages 279-285, May.
    26. Jasmin Thomas, 2015. "Benchmarking Metis Economic and Social Development," CSLS Research Reports 2015-07, Centre for the Study of Living Standards.
    27. Emily Nix & Nancy Qian, 2015. "The Fluidity of Race: “Passing” in the United States, 1880-1940," NBER Working Papers 20828, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maggie Jones & Michael Barber, 2019. "Inequalities in Test Scores between Indigenous and Non-Indigenous Youth in Canada," Department Discussion Papers 1904, Department of Economics, University of Victoria.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jones, Maggie E.C., 2023. "Post-secondary funding and the educational attainment of indigenous students," Economics of Education Review, Elsevier, vol. 97(C).
    2. Molina, Teresa & Rivadeneyra, Ivan, 2021. "The schooling and labor market effects of eliminating university tuition in Ecuador," Journal of Public Economics, Elsevier, vol. 196(C).
    3. Bednar, Steven & Gicheva, Dora, 2013. "Tax benefits for graduate education: Incentives for whom?," Economics of Education Review, Elsevier, vol. 36(C), pages 181-197.
    4. 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.
    5. Gabrielle Fack & Julien Grenet, 2015. "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 1-34, April.
    6. Curtis J. Simon & Sebastian Negrusa & John T. Warner, 2010. "Educational Benefits And Military Service: An Analysis Of Enlistment, Reenlistment, And Veterans' Benefit Usage 1991–2005," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 1008-1031, October.
    7. Susan Dynarski & Judith Scott-Clayton & Mark Wiederspan, 2013. "Simplifying Tax Incentives and Aid for College: Progress and Prospects," NBER Chapters, in: Tax Policy and the Economy, Volume 27, pages 161-201, National Bureau of Economic Research, Inc.
    8. Viktor Steiner & Katharina Wrohlich, 2012. "Financial Student Aid and Enrollment in Higher Education: New Evidence from Germany," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 124-147, March.
    9. Susan Dynarski, 2008. "Building the Stock of College-Educated Labor," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 576-610.
    10. Ehrenberg, R.G.Ronald G., 2004. "Econometric studies of higher education," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 19-37.
    11. Waddell, Glen R. & Singell Jr., Larry D., 2011. "Do no-loan policies change the matriculation patterns of low-income students?," Economics of Education Review, Elsevier, vol. 30(2), pages 203-214, April.
    12. Lindsay C. Page & Judith Scott-Clayton, 2015. "Improving College Access in the United States: Barriers and Policy Responses," NBER Working Papers 21781, National Bureau of Economic Research, Inc.
    13. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    14. repec:hal:pseose:halshs-01155638 is not listed on IDEAS
    15. Page, Lindsay C. & Scott-Clayton, Judith, 2016. "Improving college access in the United States: Barriers and policy responses," Economics of Education Review, Elsevier, vol. 51(C), pages 4-22.
    16. Juanna Schrøter Joensen, 2010. "Timing and Incentives: Impacts of Student Aid on Academic Achievement," 2010 Meeting Papers 823, Society for Economic Dynamics.
    17. Mary Donegan & Nichola Lowe, 2008. "Inequality in the Creative City: Is There Still a Place for “Old-Fashioned†Institutions?," Economic Development Quarterly, , vol. 22(1), pages 46-62, February.
    18. Azzolini, Davide & Martini, Alberto & Rettore, Enrico & Romano, Barbara & Schizzerotto, Antonio & Vergolini, Loris, 2018. "Testing a Social Innovation in Financial Aid for Low-Income Students: Experimental Evidence from Italy," IZA Discussion Papers 11625, Institute of Labor Economics (IZA).
    19. Koen Declercq & Erwin Ooghe, 2021. "Should Higher Education Be Subsidized More?," CESifo Working Paper Series 9377, CESifo.
    20. Laiqun Jin & Xiuyan Liu & Sam Hak Kan Tang, 2021. "High-Technology Zones, Misallocation of Resources among Cities and Aggregate Productivity: Evidence from China," Economics Discussion / Working Papers 21-11, The University of Western Australia, Department of Economics.
    21. Benabou, Roland, 2005. "Inequality, Technology and the Social Contract," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 25, pages 1595-1638, Elsevier.

    More about this item

    Keywords

    student aid; education; post-secondary funding; tuition; labour supply; education choice; high school graduation;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:1373. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.