Josh Angrist, David Autor, Amanda Pallais, 06 December 2020

The US government and private organisations spend substantial amounts on financial aid for college students. Does this lead more students to complete college, or simply reimburse students who would have earned degrees anyway? This column reports on a randomised controlled trial with a private provider of post-secondary grant aid in Nebraska. It finds that awards increase enrolment and that recipients are considerably more likely to enrol at a four-year, rather than a two-year, college. Awards also boost bachelor’s degree completion rates in particular among subgroups that are typically less likely to complete a college degree.

Mark Colas, Sebastian Findeisen, Dominik Sachs, 31 October 2020

Need-based financial aid helps underprivileged students in the US attend university. This column combines theoretical and empirical analyses to determine the optimal level of that aid and finds that current aid packages in the US are significantly less need-based than they should be. Not only does need-based financial aid help to reduce inequality, it is also an investment in future tax revenue, making it an optimal subsidy from an efficiency standpoint. In this case, equity and efficiency go hand in hand.

Philippe Belley, Marc Frenette, Lance Lochner, 24 September 2011

As scores of young men and women wave goodbye to their parents and prepare to start their university educations, this column asks whether providing more financial aid would increase the number of students enrolling from the poorest backgrounds. It looks at data from the US and Canada to see if the differences in funding for disadvantaged students can explain some of the differences in educational and social outcomes between the two countries.

Ricardo Cabral, 15 May 2011

Greece, Ireland, and more recently Portugal have applied for EU and IMF financial aid. This column argues the accompanying adjustment programmes should be modified to reflect the balance of payments and external debt crises these countries face. It suggests that these countries’ public and private debt should be restructured and their tax structure should be rebalanced to replicate the effect of currency devaluation and so improve these countries’ external competitiveness.

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