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The Effects of Financial Aid and Returns Information in Selective and Less Selective Schools: Experimental Evidence from Chile

Author

Listed:
  • Busso, Matías
  • Dinkelman, Taryn
  • Martínez, Claudia
  • Romero, Dario

Abstract

Schools that provide higher education often belong to either a merit-based selective system or an open-access less selective system. This paper presents the results of a field experiment that provided Grade 12 students in Chile with tailored information about financial aid and average earnings and employment probabilities for schools and careers in both types of schools. No effect is found on the extensive margins of enrollment in the selective or in the less selective sector. Treated students change their intensive margin decisions: they choose careers and schools with lower expected wages and lower employment probabilities, but with higher quality relative to their baseline preferences.

Suggested Citation

  • Busso, Matías & Dinkelman, Taryn & Martínez, Claudia & Romero, Dario, 2016. "The Effects of Financial Aid and Returns Information in Selective and Less Selective Schools: Experimental Evidence from Chile," IDB Publications (Working Papers) 7937, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:7937
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    as
    1. Philip Oreopoulos & Ryan Dunn, 2013. "Information and College Access: Evidence from a Randomized Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 3-26, January.
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    5. Caroline Hoxby & Christopher Avery, 2013. "The Missing "One-Offs": The Hidden Supply of High-Achieving, Low-Income Students," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 1-65.
    6. Justine S. Hastings & Jeffrey M. Weinstein, 2008. "Information, School Choice, and Academic Achievement: Evidence from Two Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(4), pages 1373-1414.
    7. Adam M. Lavecchia & Heidi Liu & Philip Oreopoulos, 2014. "Behavioral Economics of Education: Progress and Possibilities," NBER Working Papers 20609, National Bureau of Economic Research, Inc.
    8. Alex Solis, 2017. "Credit Access and College Enrollment," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 562-622.
    9. Loreto Reyes & Jorge Rodríguez & Sergio S. Urzúa, 2013. "Heterogeneous Economic Returns to Postsecondary Degrees: Evidence from Chile," NBER Working Papers 18817, National Bureau of Economic Research, Inc.
    10. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 515-548.
    11. Eric P. Bettinger & Bridget Terry Long & Philip Oreopoulos & Lisa Sanbonmatsu, 2012. "The Role of Application Assistance and Information in College Decisions: Results from the H&R Block Fafsa Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1205-1242.
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    Cited by:

    1. Adam Altmejd & Andrés Barrios-Fernández & Marin Drlje & Joshua Goodman & Michael Hurwitz & Dejan Kovac & Christine Mulhern & Christopher Neilson & Jonathan Smith, 2021. "O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1831-1886.
    2. Andrés Barrios-Fernández, 2022. "Neighbors' Effects on University Enrollment," American Economic Journal: Applied Economics, American Economic Association, vol. 14(3), pages 30-60, July.
    3. Bonilla-Mejía, Leonardo & Bottan, Nicolas L. & Ham, Andrés, 2019. "Information policies and higher education choices experimental evidence from Colombia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    4. Hassani-Nezhad, Lena & Anderberg, Dan & Chevalier, Arnaud & Lührmann, Melanie & Pavan, Ronni, 2021. "Higher education financing and the educational aspirations of teenagers and their parents," Economics of Education Review, Elsevier, vol. 85(C).
    5. Marcelo Gantier & Rafael Novella & Andrea Repetto, 2024. "Subjective expectations and schooling choices in Latin America and the Caribbean," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(3), pages 1593-1621, April.
    6. French, Robert & Oreopoulos, Philip, 2017. "Behavioral barriers transitioning to college," Labour Economics, Elsevier, vol. 47(C), pages 48-63.
    7. Christopher Neilson & Adam Altmejd & Andres Barrios-Fernandez & Marin Drlje & Dejan Kovac, 2019. "Siblings' Effects on College and Major Choices: Evidence from Chile, Croatia and Sweden," Working Papers 633, Princeton University, Department of Economics, Industrial Relations Section..
    8. Kerr, Sari Pekkala & Pekkarinen, Tuomas & Sarvimäki, Matti & Uusitalo, Roope, 2020. "Post-secondary education and information on labor market prospects: A randomized field experiment," Labour Economics, Elsevier, vol. 66(C).
    9. Michelle Gonz'alez Amador & Robin Cowan & Eleonora Nillesen, 2022. "Peer Networks and Malleability of Educational Aspirations," Papers 2209.08340, arXiv.org.

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    More about this item

    Keywords

    school choice; government loans; scholarships;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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