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

Eric Bettinger, Oded Gurantz, Laura Kawano and Bruce Sacerdote ()

No 22347, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the long-term impacts of California’s state-based financial aid by tracking students’ 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. Aid eligibility has no impact on take-up of the Pell or federal tax credits for higher education. 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-codes: H2 H4 H41 H52 I2 I22 I23 I24 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-edu, nep-ias, nep-lma, nep-net and nep-pub
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Published as American Economic Journal: Economic Policy, Vol. 11, No. 1, February 2019 (Pp. 64-94)

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