Income-Based Scholarships and Access to Higher Education

• In Event: Higher Education Costs, Finances, and Opportunity

Abstract

Financial aid to college students has been widely implemented by governments in an attempt to reduce the entry barriers to higher education (HE). In this paper, we assess the effectiveness of income-based scholarships on human capital accumulation by employing a difference-in-differences framework to investigate the impacts of a Brazilian federal program created in 2005 that grants college scholarships to low-income students. We provide causal evidence that, by 2007, every US$ 100 million spent by the government with Prouni’s tax waivers generated an approximate 0.5 percentage points increase in HE enrolment rates (or, equivalently, every US$ 1,000 per student increased this rate in 1.3 percentage points). We also find evidence of heterogeneous effects by gender and race.

Authors

• Guilherme Strifezzi, Universitat de Barcelona

• Álvaro Choi, Fundació Bosch i Gimpera CIF G08906653