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  4. July 2019
  5. ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare

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

  • Jeffrey T. Denning
  • Benjamin M. Marx
  • Lesley J. Turner
American Economic Journal: Applied Economics
vol. 11, no. 3, July 2019
(pp. 193-224)
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Abstract

We estimate effects of the Pell Grant—the largest US 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.

Citation

Denning, Jeffrey T., Benjamin M. Marx, and Lesley J. Turner. 2019. "ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare." American Economic Journal: Applied Economics, 11 (3): 193-224. DOI: 10.1257/app.20180100

Additional Materials

JEL Classification

  • H75 State and Local Government: Health; Education; Welfare; Public Pensions
  • I22 Educational Finance; Financial Aid
  • I23 Higher Education; Research Institutions
  • I26 Returns to Education
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
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