The Effect of Grants on University Drop-Out Rates: Evidence on the Italian Case

Francesca Modena, Enrico Rettore and Giulia Tanzi ()
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Giulia Tanzi: Bank of Italy

No 12886, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we evaluate the impact of need-based grants on university drop-out rates in the first year of enrollment, using student-level administrative data from all Italian universities in the period 2003-2013. We exploit the fact that not all eligible students receive financial aid due to limited resources to generate a treatment and a control group. Using this partition, we estimate the average treatment effect, i.e. the average effect on low income students, controlling for a set of observable characteristics by running regressions on blocks defined on the propensity score. Results point towards a sizeable effect of grants in reducing dropping out from higher education: around one third of these students would have left university in the first year in absence of the grants. This evidence is robust to a variety of specifications and sample selection criteria.

Keywords: student financial aid; university dropout; higher education; human capital; blocking with regression adjustment (search for similar items in EconPapers)
JEL-codes: C21 C35 I22 I23 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-01
New Economics Papers: this item is included in nep-edu and nep-eur
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Citations: View citations in EconPapers (9)

Published - published in: Journal of Human Capital, 2020, 14 (3), 343 - 370

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Related works:
Working Paper: The effect of grants on university drop-out rates: evidence on the Italian case (2018)
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