Working Paper: NBER ID: w9400
Authors: Susan Dynarski
Abstract: Since the early Nineties, a dozen states have established broad-based merit aid programs. The typical program waives tuition and fees at public colleges and universities in one's home state. Unlike traditional merit programs, such as the National Merit Scholarship, this aid requires relatively modest academic performance and provide scholarships to hundreds of thousands of students. This paper examines how merit aid programs in seven states have affected an array of schooling decisions, paying particular attention to how the effects have varied by race and ethnicity. I find that the new programs typically increase the attendance probability of college-age youth by five to seven percentage points. The merit programs also shift students toward four-year schools and away from two-year schools. The Georgia HOPE Scholarship, which has been found to widen racial gaps in college attendance (Dynarski, 2000) is atypical in its distributional impact, with the other state's programs tending to have a more positive effect on the college attendance rate of Blacks and Hispanics. I attribute HOPE's unique distributional effect to its relatively stringent academic requirements and a recently-eliminated provision that channeled the most generous scholarships to higher-income students.
Keywords: No keywords provided
JEL Codes: I22; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| merit aid (I22) | increased college attendance (I23) |
| merit aid (I22) | shift from two-year to four-year institutions (I23) |
| merit aid (I22) | differential impacts by race and ethnicity (J15) |
| Georgia Hope Scholarship (I28) | widened racial gaps in college attendance (I24) |
| Georgia Hope Scholarship (I28) | favored higher-income students (I24) |