NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Long Run Impacts of Merit Aid: Evidence from California's Cal Grant

Eric Bettinger, Oded Gurantz, Laura Kawano, Bruce Sacerdote

NBER Working Paper No. 22347
Issued in June 2016
NBER Program(s):CH, ED, LS, PE

We examine the impacts of being awarded a Cal Grant, among the most generous state merit aid programs. We exploit variation in eligibility rules using GPA and family income cutoffs that are ex ante unknown to applicants. Cal Grant eligibility increases degree completion by 2 to 5 percentage points in our reduced form estimates. Cal Grant also induces modest shifts in institution choice at the income discontinuity. At ages 28-32, Cal Grant receipt increases by three percentage points the likelihood of living in California at the income discontinuity, and raises earnings by four percentage points at the GPA discontinuity.

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Document Object Identifier (DOI): 10.3386/w22347

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