Who Does Aid Help? Examining Heterogeneity in the Effect of Grant Aid on Achievement

40 Pages Posted: 14 Aug 2018 Last revised: 8 Jun 2020

See all articles by Breyon Williams

Breyon Williams

University of South Carolina - Department of Economics

Date Written: March 7, 2019

Abstract

Does grant aid impact achievement differently for low- and high-income students? I exploit the eligibility requirements of a state scholarship program that awards additional funds to merit aid recipients majoring in science, technology, engineering, or math (STEM) fields. A triple difference design, using administrative data from the University of South Carolina and exploiting differences over time by merit aid recipient status and by major type (STEM or non-STEM), shows that grant aid increases the GPAs and graduation prospects of low-income students by 0.169 GPA points and 10.7 percentage points, respectively, but has little impact on high-income students. Additional analysis suggests that the reduction in work-study among low-income students may be a potential mechanism for the heterogeneous achievement effects of grant aid by income. These results suggest that merit aid programs could be targeted more effectively than most currently are.

Keywords: achievement, heterogeneous effects by income, grant aid

JEL Classification: I22, I24

Suggested Citation

Williams, Breyon, Who Does Aid Help? Examining Heterogeneity in the Effect of Grant Aid on Achievement (March 7, 2019). Available at SSRN: https://ssrn.com/abstract=3216238 or http://dx.doi.org/10.2139/ssrn.3216238

Breyon Williams (Contact Author)

University of South Carolina - Department of Economics ( email )

Columbia, SC
United States

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