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The Behavioral and Distributional Implications of Aid for College

This paper examines work that has used quasi-experimental methodology to isolate exogenous sources of variation in schooling costs in order to determine their effect on schooling decisions. Subsidies to post-secondary schooling do appear to affect schooling decisions. The best estimates suggest that...

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Bibliographic Details
Published in:The American economic review 2002-05, Vol.92 (2), p.279-285
Main Author: Dynarski, Susan
Format: Article
Language:English
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Summary:This paper examines work that has used quasi-experimental methodology to isolate exogenous sources of variation in schooling costs in order to determine their effect on schooling decisions. Subsidies to post-secondary schooling do appear to affect schooling decisions. The best estimates suggest that eligibility for $1000 of subsidy increases college attendance rates by roughly 4%. Aid eligibility also appears to increase completed schooling, but the evidence is comparatively thin on this outcome. A given dollar of subsidy does not consistently have a larger impact on the schooling of low income or minority individuals. Indeed, the strongest empirical evidence is evenly divided on this matter, with half of the well identified estimates indicating that the effect of a subsidy rises with income.
ISSN:0002-8282
1944-7981
DOI:10.1257/000282802320189401