Separating the Structural and Composition Impacts of Financial Aid on the Choice of Major

Christian Belzil, Jörgen Hansen and Julie Pernaudet
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Jörgen Hansen: Concordia University, CIREQ and IZA
Julie Pernaudet: University of Chicago

No 2024-14, Working Papers from Center for Research in Economics and Statistics

Abstract: Using the unique design of a field experiment among Canadian high school students combined with early life-cycle data collected 10 years later, we estimate the impacts of financial aid distributed as grants on the distribution of university majors. We find that financial aid raises net university enrollment and graduation rates but attracts marginal entrants with lower STEM enrollment probabilities than the population enrolling under the status quo (the composition effect). Among the latter population, financial aid also reduces STEM enrollment and graduation probabilities (the structural effect). Our results thereby reveal potential unintended consequences of financial aid on students’ educational outcomes.

Keywords: Financial Aid; College Enrollment; College Majors; STEM; Liquidity Constraints. (search for similar items in EconPapers)
JEL-codes: I2 J1 J3 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2024-12-09
New Economics Papers: this item is included in nep-edu and nep-exp
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