Financial Aid and Upward Mobility: Evidence from Colombia’s Ser Pilo Paga

Juliana Londoño-Vélez, Catherine Rodriguez, Fabio Sanchez Torres and Luis E. Álvarez-Arango

No 31737, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the impact of financial aid on upward mobility. We estimate the causal impacts of a Colombian policy targeting high-achieving, low-SES students on later-life educational and labor-market outcomes. Using regression discontinuity design, difference-in-differences, and population-wide administrative microdata, we find that the policy boosted attendance and completion at high-value-added colleges, particularly in STEM fields. Improved college quality led to greater skill development. Nine years later, recipients earn 18 log points more and are more likely to reach the top 1%. The policy narrowed socioeconomic gaps in college quality, attainment, skill development, earnings, and returns to ability, improving equity and efficiency.

JEL-codes: H52 I22 I23 I24 I26 (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-edu, nep-lam and nep-ure
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