SBEE Seminar Series: Amanda Pallais
College Aid and the Marginal Cost of a College Degree: Evidence from a Randomized Trial
A large privately-funded scholarship program randomized 'full-freight' financial aid awards to entering students at Nebraska's public colleges and universities. Scholarship awards increased four-year college attendance among recipients but had little effect on two-year or overall attendance. Awards granted to students targeting four-year colleges boosted six-year graduation rates by 8.5 percentage points, with gains unevenly distributed, ranging from a high of 15 - 20 points among minority program applicants and those with low ACT scores, to zero for well-prepared program applicants.
Roughly 92% of the scholarship aid went to students who would have graduated without scholarship aid. Average scholarship costs were $43,000 per additional college year completed and $425,000 per additional four-year degree obtained, but this falls to $230,000 for nonwhite students. Costs were high in part because scholarship awards lengthened time to degree among recipients. Nevertheless, the bulk of scholarship expenditures reflect transfers from scholarship sponsors to scholarship recipients rather than incremental expenditures on post-secondary education.
Amanda Pallais is a Professor of Economics at Harvard University. Her research studies the labor market performance and educational investment decisions of disadvantaged and socially excluded groups.
Her research has shown how manager bias can depress the job performance of minorities, how the cost of developing a reputation can make it difficult for young workers to enter the labor market, how marriage market concerns can lead women to invest less in labor market success, and how financial aid can increase the educational attainment of low-income students. Pallais received her B.A. in Economics and Mathematics from the University of Virginia in 2006 and her Ph.D. in Economics from MIT in 2011.
Sponsors of this talk are the School of Information, the Ross School of Business, the Department of Economics and Public Finance at Ross.
This event will take place from 11:40 am until 12:50 pm.