Working Paper: NBER ID: w17861
Authors: Jonathan Meer; Harvey S. Rosen
Abstract: We investigate how undergraduates' financial aid packages affect their subsequent donative behavior as alumni. The empirical work is based upon micro data on alumni giving at an anonymous research university. We focus on three types of financial aid, scholarships, loans, and campus jobs. A novel aspect of our modeling strategy is that, consistent with the view of some professional fundraisers, we allow the receipt of a given form of aid per se to affect alumni giving. At the same time, our model allows the amount of the support to affect giving behavior nonlinearly.\n\nOur main findings are: 1) Individuals who took out student loans are less likely to make a gift, other things being the same. We conjecture that this phenomenon is caused by an "annoyance effect" -- alumni resent the fact that they are burdened with loans. 2) Scholarship aid reduces the size of a gift, but has little effect on the probability of donating. The negative effect of receiving a scholarship on donations decreases in absolute value with the size of the scholarship. We do not find any evidence that scholarship recipients give less because they have relatively low incomes post graduation. 3) Aid in the form of campus jobs does not have a strong effect on donative behavior.
Keywords: financial aid; alumni giving; scholarships; student loans; campus jobs
JEL Codes: I22; I23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Student loans (G51) | Probability of making a gift (D64) |
| Amount of loans (H81) | Size of contributions (D64) |
| Scholarship aid (I22) | Size of gifts (D64) |
| Scholarship aid (I22) | Probability of making a gift (D64) |
| Campus jobs (M59) | Alumni giving behavior (D64) |