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The Effects of Need-Based Financial Aid on Employment and Earnings: Experimental Evidence from the Fund for Wisconsin Scholars

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  • Deven Carlson
  • Alex Schmidt
  • Sarah Souders
  • Barbara Wolfe

Abstract

We experimentally estimate the effects of a need-based financial aid offer on students’ annual in-state employment and earnings up to eight years after the initial offer. For students in four-year universities, we show the aid offer to reduce employment and earnings throughout the period we study but provide evidence of increased effort on coursework during students, in-college years. We examine the role of outstate migration and reduced loan debt in generating the negative effects in students’ post-college years. We find no significant effects of the aid offer on the labor market outcomes of individuals in two-year institutions.

Suggested Citation

  • Deven Carlson & Alex Schmidt & Sarah Souders & Barbara Wolfe, 2025. "The Effects of Need-Based Financial Aid on Employment and Earnings: Experimental Evidence from the Fund for Wisconsin Scholars," Journal of Human Resources, University of Wisconsin Press, vol. 60(2), pages 327-370.
    • Handle: RePEc:uwp:jhriss:v:60:y:2025:i:2:p:327-370
    Note: DOI: https://doi.org/10.3368/jhr.0121-11458R1
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    Cited by:

    1. Barr, Andrew & Bird, Kelli A. & Castleman, Benjamin L., 2021. "The effect of reduced student loan borrowing on academic performance and default: Evidence from a loan counseling experiment," Journal of Public Economics, Elsevier, vol. 202(C).

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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