Propelled: The Effects of Grants on Graduation, Earnings, and Welfare

38 Pages Posted: 17 Sep 2018

See all articles by Jeffrey Denning

Jeffrey Denning

Brigham Young University

Benjamin Marx

University of Illinois at Urbana-Champaign

Lesley Turner

University of Maryland

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Abstract

We estimate effects of the Pell Grant - the largest U.S. federal grant for college students - using administrative data from Texas public colleges and a discontinuity in grant generosity for low-income students. Within four-year institutions, eligibility for additional grant aid significantly increases first-time students' degree completion and later earnings. Our estimated impacts on earnings alone are enough to fully recoup government expenditures within 10 years, suggesting that financial aid likely pays for itself several times over.

Keywords: Pell Grant

JEL Classification: H52, I22, I26

Suggested Citation

Denning, Jeffrey and Marx, Benjamin and Turner, Lesley, Propelled: The Effects of Grants on Graduation, Earnings, and Welfare. IZA Discussion Paper No. 11792, Available at SSRN: https://ssrn.com/abstract=3249906 or http://dx.doi.org/10.2139/ssrn.3249906

Jeffrey Denning (Contact Author)

Brigham Young University ( email )

Provo, UT 84602
United States

Benjamin Marx

University of Illinois at Urbana-Champaign ( email )

Lesley Turner

University of Maryland ( email )

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