Applied Economics Lunch Seminar

Du 09/05/2017 de 12:30 à 13:30

Salle R2-01, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris

MONTALBAN-CASTILLA José (PSE)

The role of need-based grants on higher education achievement

Little evidence exists on the specific contribution of performance-based incentive components to the effect of need-based financial aid on student's outcomes. This paper aims at elucidate the causal effect of financial aid on the academic performance of low-income students in higher education, using administrative micro-data from Carlos III University of Madrid. Under the propitious Spanish national means-tested grant program, I am able to disentangle the impacts from two different grant schemes with different intensities of performance-based incentives. I use the sharp discontinuities that are induced by family income thresholds to estimate the effect of being eligible to different categories of scholarships, and exploit the fact that academic performance requirements (i.e. having passed a certain number of credits in the previous academic year) became more stringent for students who applied for the Spanish need-based grant after 2012. I find no effects of the large means-tested grant on students' academic performance with weak achievement component. However, I find positive effects on students' academic performance when the achievement component is more demanding, for those students who are more entitle to the grant. Students' also enhance their fraction of turned-up exams and their average GPA on subjects showed-up to final exam. No evidence is found on students' subjects selection and dropout effects that might contaminate the results.