Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment
Christian Belzil (),
Arnaud Maurel () and
Modibo Sidibé ()
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Modibo Sidibé: Duke University
No 13096, IZA Discussion Papers from Institute of Labor Economics (IZA)
Using data from a Canadian field experiment on the financial barriers to higher education, we estimate the distribution of the value of financial aid for prospective students. Our results point out that a considerable share of prospective students are affected by credit constraints. We find that most of the individuals are willing to pay a sizable interest premium above the prevailing market rate for the option to take up a loan, with a median interest rate wedge equal to 6.8 percentage points for a $1,000 loan. The willingness-to-pay for financial aid is highly heterogeneous across students, with preferences and in particular discount factors, playing a key role in accounting for this variation.
Keywords: higher education financing; time and risk preferences; field experiment (search for similar items in EconPapers)
JEL-codes: I22 I23 J24 (search for similar items in EconPapers)
Pages: 59 pages
New Economics Papers: this item is included in nep-edu and nep-exp
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Forthcoming in: Journal of Labor Economics
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Working Paper: Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment (2020)
Working Paper: Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment (2017)
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