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Upstream and Downstream Impacts of College Merit-Based Financial Aid for Low-Income Students: Ser Pilo Paga in Colombia

Author

Listed:
  • Juliana Londoño-Vélez
  • Catherine Rodríguez
  • Fabio Sánchez

Abstract

How does financial aid affect postsecondary enrollment, college choice, and student composition? We present new evidence based on a large-scale program available to high-achieving, low-income students for attending high-quality colleges in Colombia. RD estimates show financial aid eligibility raised immediate enrollment by 56.5 to 86.5 percent, depending on the complier population. This rise, driven by matriculation at private, high-quality colleges, closed the SES enrollment gap among high achievers. Moreover, a DID approach suggests enrollment of aid-ineligible students also improved because college supply expanded in response to heightened demand. With ability stratification largely replacing SES stratification, diversity increased 46 percent at private, high-quality colleges.

Suggested Citation

  • Juliana Londoño-Vélez & Catherine Rodríguez & Fabio Sánchez, 2020. "Upstream and Downstream Impacts of College Merit-Based Financial Aid for Low-Income Students: Ser Pilo Paga in Colombia," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 193-227, May.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:2:p:193-227
    DOI: 10.1257/pol.20180131
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    References listed on IDEAS

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    1. Seth D. Zimmerman, 2019. "Elite Colleges and Upward Mobility to Top Jobs and Top Incomes," American Economic Review, American Economic Association, vol. 109(1), pages 1-47, January.
    2. Sarah R. Cohodes & Joshua S. Goodman, 2014. "Merit Aid, College Quality, and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 251-285, October.
    3. Atila Abdulkadiroğlu & Parag A. Pathak & Christopher R. Walters, 2018. "Free to Choose: Can School Choice Reduce Student Achievement?," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 175-206, January.
    4. Sebastian Calonico & Matias D. Cattaneo & Rocio Titiunik, 2014. "Robust Nonparametric Confidence Intervals for Regression‐Discontinuity Designs," Econometrica, Econometric Society, vol. 82, pages 2295-2326, November.
    5. David S. Lee, 2009. "Training, Wages, and Sample Selection: Estimating Sharp Bounds on Treatment Effects," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(3), pages 1071-1102.
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    Citations

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    Cited by:

    1. Adriana Camacho & Catherine Rodríguez & Fabio Sanchez, 2022. "Does financial aid for top international graduate programs boost education and earnings? Evidence from Colombia," Documentos CEDE 20124, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Laajaj, Rachid & Moya, Andrés & Sánchez, Fabio, 2022. "Equality of opportunity and human capital accumulation: Motivational effect of a nationwide scholarship in Colombia," Journal of Development Economics, Elsevier, vol. 154(C).
    3. Posso, Christian & Saravia, Estefanía & Uribe, Pablo, 2023. "Acing the test: Educational effects of the SaberEs test preparation program in Colombia," Economics of Education Review, Elsevier, vol. 97(C).
    4. Ferreyra,Maria Marta & Garriga,Carlos & Martin,Juan David & Sanchez Diaz,Angelica Maria, 2020. "Raising College Access and Completion : How Much Can Free College Help ?," Policy Research Working Paper Series 9428, The World Bank.
    5. Juliana Jaramillo-Echeverri, 2024. "Movilidad social en la educación: el caso de la Universidad de los Andes en Colombia entre 1949 y 2018," Cuadernos de Historia Económica 61, Banco de la Republica de Colombia.
    6. Busso, Matias & Montaño, Sebastián & Muñoz-Morales, Juan S., 2023. "Signaling Specific Skills and the Labor Market of College Graduates," IZA Discussion Papers 16449, Institute of Labor Economics (IZA).
    7. Londoño-Vélez, Juliana, 2022. "The impact of diversity on perceptions of income distribution and preferences for redistribution," Journal of Public Economics, Elsevier, vol. 214(C).
    8. Li, Hongbin & Meng, Lingsheng & Mu, Kai & Wang, Shaoda, 2024. "English language requirement and educational inequality: Evidence from 16 million college applicants in China," Journal of Development Economics, Elsevier, vol. 168(C).

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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