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

Juliana Londoño-Vélez, Catherine Rodríguez, Fabio Sánchez and Luis Esteban Álvarez-Arango

Journal of Political Economy, 2026, vol. 134, issue 7, 2119 - 2165

Abstract: We study the impact of financial aid on upward mobility. We estimate the causal impacts of a Colombian policy targeting high-achieving, low-socioeconomic-status 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.

Date: 2026
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