NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Parental Resources and College Attendance: Evidence from Lottery Wins

George Bulman, Robert Fairlie, Sarena Goodman, Adam Isen

NBER Working Paper No. 22679
Issued in September 2016
NBER Program(s):   ED

We examine more than one million children whose parents won a state lottery to trace out the effect of additional household resources on college outcomes. The analysis draws on the universe of federal tax records linked to federal financial aid records and leverages substantial variation in the size and timing of wins. The results reveal modest, increasing, and only weakly concave effects of resources: wins less than $100,000 have little influence on college-going (i.e., effects greater than 0.3 percentage point can be ruled out) while very large wins that exceed the cost of college imply a high upper bound (e.g., wins over $1,000,000 increase attendance by 10 percentage points). The effects are smaller among low-SES households. Further, while lottery wins reduce financial aid, attendance patterns are not moderated by this crowd-out. Overall, the results suggest that households derive consumption value from college and, in the current policy environment, do not generally face binding borrowing constraints.

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Document Object Identifier (DOI): 10.3386/w22679

 
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