The Long Run Impacts of Merit Aid: Evidence from California's Cal Grant

77 Pages Posted: 20 Jun 2016

See all articles by Eric Bettinger

Eric Bettinger

Stanford University; National Bureau of Economic Research (NBER)

Oded Gurantz

Stanford University

Laura Kawano

University of Michigan at Ann Arbor

Bruce Sacerdote

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 2016

Abstract

We examine the long-term impacts of California’s state-based financial aid by tracking students’ educational and labor force outcomes for up to 14 years after high school graduation. We identify program impacts by exploiting variation in eligibility rules using GPA and family income cutoffs that are ex ante unknown to applicants. Aid eligibility increases undergraduate and graduate degree completion, and for some subgroups, raises longer-run annual earnings and the likelihood that young adults reside in California. Aid eligibility has no impact on take-up of the Pell or federal tax credits for higher education. These findings suggest that the net cost of financial aid programs may frequently be overstated, though our results are too imprecise to provide exact cost-benefit estimates.

Suggested Citation

Bettinger, Eric and Gurantz, Oded and Kawano, Laura and Sacerdote, Bruce, The Long Run Impacts of Merit Aid: Evidence from California's Cal Grant (June 2016). NBER Working Paper No. w22347. Available at SSRN: https://ssrn.com/abstract=2797921

Eric Bettinger (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Oded Gurantz

Stanford University ( email )

Laura Kawano

University of Michigan at Ann Arbor ( email )

Bruce Sacerdote

Dartmouth College - Department of Economics ( email )

6106 Rockefeller Hall
Hanover, NH 03755
United States
603-646-2121 (Phone)
603-646-2122 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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