Working Paper: NBER ID: w24662
Authors: David E. Frisvold; Melinda Pitts
Abstract: This paper examines the impact of state merit-aid programs on the labor market attachment of high school-aged youths. The labor force participation rate of teenagers has fallen substantially in recent decades, coinciding with the introduction of merit-aid programs. These programs reduce the price of attending an in-state public college or university for high-achieving students and have the potential to influence students’ allocation of time and effort between labor market activities, human capital development, and other forms of leisure. We examine the influence of these programs based on their generosity, both in the amount of aid provided to a recipient and the percent of students who are recipients of aid, and in their selectivity. Our results suggest that programs that are more selective reduce labor force participation, but are not a significant cause in the decline in teenage labor force participation in recent decades.
Keywords: merit aid; youth labor market; labor force participation
JEL Codes: I2; J2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introduction of highly selective merit-aid program (I22) | reduction in teenage labor force participation (J21) |
| merit-aid programs with lower selectivity and higher generosity (I24) | increase in labor force participation among teenagers (J21) |
| merit-aid programs (I22) | influence on labor supply decisions (J29) |
| characteristics of merit-aid programs (I22) | shape labor supply decisions among high school-aged youths (J29) |