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A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going

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  • Thomas J. Kane

Abstract

Although state and federal governments heavily subsidize the price of college, estimates of the impact of these subsidies on college enrollment have not been well-identified. I use a regression discontinuity design to study the impact of the CalGrant program in California on college going. Eligibility requires students to meet minimum thresholds on three characteristics: income, assets and high school Grade Point Average. Because there are several dimensions of eligibility, the analysis allows for specification tests, estimating any discontinuities along a given dimension of eligibility, dependent upon whether one satisfied the other two dimensions of eligibility. The paper uses a novel data collection strategy to measure subsequent college enrollment for 150,000 financial aid applicants in 1998 and 1999. The results suggest large impacts (3 to 4 percentage points) of grant eligibility on college enrollment among financial aid applicants, with larger impacts on the choice of private four-year colleges in California.

Suggested Citation

  • Thomas J. Kane, 2003. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going," NBER Working Papers 9703, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9703
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    References listed on IDEAS

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    1. David M. Linsenmeier & Harvey S. Rosen & Cecilia E. Rouse, 2001. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," Working Papers 126, Princeton University, Department of Economics, Center for Economic Policy Studies..
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    4. 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.
    5. repec:pri:cepsud:76rosen is not listed on IDEAS
    6. Dick, Andrew W. & Edlin, Aaron S., 1997. "The implicit taxes from college financial aid," Journal of Public Economics, Elsevier, vol. 65(3), pages 295-322, September.
    7. David M. Linsenmeier & Harvey S. Rosen & Cecilia E. Rouse, 2001. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," Working Papers 126, Princeton University, Department of Economics, Center for Economic Policy Studies..
    8. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(3), pages 629-662, September.
    9. David M. Linsenmeier & Harvey Rosen & Cecilia Rouse, 2001. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," Working Papers 838, Princeton University, Department of Economics, Industrial Relations Section..
    10. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts," NBER Working Papers 6385, National Bureau of Economic Research, Inc.
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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education

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