Do Lottery Scholarship Programs Improve Graduation Rates? Evidence From the New Mexico Legislative Lottery Scholarship

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Abstract

We use administrative data to investigate the effect of the New Mexico Legislative Lottery Scholarship on completion rates at the University of New Mexico. As the scholarship is available only to resident students, effects are estimated by comparing pre- and post-program outcomes for residents and nonresidents. The program is not associated with any overall impact on completion rates. However, meaningful effects appear when the model is disaggregated by student ability. Large gains are observed for students in the top half of the high school GPA distribution. By contrast, program-eligible students in the bottom half of the distribution were either unaffected or graduated at lower rates. Difference-in-differences matching is employed to address observable differences between resident and nonresident students.

Author

• Christopher Erwin, University of New Mexico