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On the design of grant assignment rules

Francesca Modena (), Giulia Martina Tanzi () and Santiago Pereda-Fernández
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Giulia Martina Tanzi: Bank of Italy

No 1307, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: One of the main goals of grants is to reduce dropout rates. In this paper, we assess how different assignment rules target different students and how they affect dropout rates in the first year of enrollment. The analysis uses administrative data from all Italian universities for the period 2003-13. We find that awarding the grant to all eligible students would significantly increase public expenses, with only a slight reduction in the dropout rate. Since we find that the grants have a heterogeneous effect according to students’ characteristics, assignment rules keeping the number of grants constant have an impact on dropout rates. In particular, targeting high-performing students would minimize dropout rates amongst grant recipients, but it would slightly increase the overall dropout rate. On the other hand, targeting those who benefit the most achieves the maximum reduction in dropout rates at the cost of increasing the number of grant recipient dropouts.

Keywords: grants; treatment assignment; university dropouts (search for similar items in EconPapers)
JEL-codes: C25 I21 I22 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-edu and nep-eur
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