UDDanKvant seminar: Laëtitia Renée

Laëtitia Renée: The Long-Term Effects of Financial Aid and Career Education: Evidence from a Randomized Experiment

Despite large investments in interventions aiming to increase college attendance, little is known about their long-term effects. In this paper, I study the effects of the Future to Discover Project, a randomized experiment that offered 4,400 Canadian high school students either the chance to participate in several career planning workshops in high school or the chance to receive an $8,000 grant upon college enrollment. I match the experimental data to post-secondary institution records and income tax files to examine the effects of the interventions on college enrollment, graduation, and earnings, from the end of high school till the age of 28. I show that the career education intervention, by affecting students’ decisions to enroll in four-year colleges, greatly improved their outcomes in the long run. In contrast, I do not find any evidence that providing students with additional financial support had any long-term monetary benefits, which is consistent with the fact that a number of grants and loans are already available in Canada. My findings also shed light on the mechanisms explaining the gap in educational attainment by parental income. I show that informational and behavioral barriers, rather than financial constraints, together with differences in academic achievement, account for most of the gap in four-year college graduation between high- and low-income students.

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