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Separating the Structural and Composition Impacts of Financial Aid on the Choice of Major

Author

Listed:
  • Christian Belzil

    (CREST, CNRS, Paris Polytechnic Institute, IZA, and CIRANO)

  • Jörgen Hansen

    (Concordia University, CIREQ and IZA)

  • Julie Pernaudet

    (University of Chicago)

Abstract

Using the unique design of a field experiment among Canadian high school students combined with early life-cycle data collected 10 years later, we estimate the impacts of financial aid distributed as grants on the distribution of university majors. We find that financial aid raises net university enrollment and graduation rates but attracts marginal entrants with lower STEM enrollment probabilities than the population enrolling under the status quo (the composition effect). Among the latter population, financial aid also reduces STEM enrollment and graduation probabilities (the structural effect). Our results thereby reveal potential unintended consequences of financial aid on students’ educational outcomes.

Suggested Citation

  • Christian Belzil & Jörgen Hansen & Julie Pernaudet, 2024. "Separating the Structural and Composition Impacts of Financial Aid on the Choice of Major," Working Papers 2024-14, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2024-14
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial Aid; College Enrollment; College Majors; STEM; Liquidity Constraints.;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    NEP fields

    This paper has been announced in the following NEP Reports:

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