Work

The Long-Run Impacts of Financial Aid: Evidence from California’s Cal Grant

Year: 2019

Type: article

Abstract: We examine the long-term impacts of California’s state-based financial aid by tracking educational and labor force outcomes for up to 14 years after high school graduation. We identify program impacts by exploiting variation in eligibility rules using GPA and family income cutoffs that are ex ante unknown to applicants. Aid eligibility increases undergraduate and graduate degree completion, and for some subgroups, raises longer-run annual earnings and the likelihood that young adults reside in California. These findings suggest that the net cost of financial aid programs may frequently be overstated, though our results are too imprecise to provide exact cost-benefit estimates. (JEL H75, I21, I22, I23, I26, I28)

Source: American Economic Journal Economic Policy

DOI: 10.1257/pol.20170466

Authors: Eric Bettinger, Oded Gurantz, Laura Kawano, Bruce Sacerdote, Michael Stevens

Institutions: Stanford University, University of Missouri, University of Michigan, Dartmouth College, United States Department of the Treasury

Language: English

Topic: Higher Education Research Studies

Subfield: Education

Field: Social Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: bronze