Conditional Cash Transfers and College Persistence: Evidence From a Randomized Need-Based Grant Program

• In Event: Does Money Matter? The Impact of Financial Aid on Student Success

Abstract

We use the random assignment of a Wisconsin need-based grant to estimate the impacts of financial aid on college persistence among Pell Grant recipients at 13 public universities. We find the only notable positive average treatment effect was a 28 percent increase in the proportion of students completing 60 credits over two years. An exploratory analysis further suggests that the program’s small average treatment effects mask heterogeneity. In particular, it appears that students with a low (pre-randomization) propensity to persist in college received sizable positive benefits, while students who were already more likely to persist in college received no benefit, and some may have been negatively affected. Overall we find that students respond to formal cash incentives in unexpected ways.

Authors

• Sara Goldrick-Rab, University of Wisconsin - Madison

• Douglas N. Harris, University of Wisconsin - Madison

• James G. Benson, University of Wisconsin - Madison

• Robert Kelchen, University of Wisconsin - Madison