Replication data for: Borrowing Trouble? Human Capital Investment with Opt-In Costs and Implications for the Effectiveness of Grant Aid

Principal Investigator(s): View help for Principal Investigator(s) Benjamin M. Marx; Lesley J. Turner

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Project Citation:

Marx, Benjamin M., and Turner, Lesley J. Replication data for: Borrowing Trouble? Human Capital Investment with Opt-In Costs and Implications for the Effectiveness of Grant Aid. Nashville, TN: American Economic Association [publisher], 2018. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116341V1

Project Description

Summary: We estimate the effect of grant aid on City University of New York (CUNY) students' borrowing and attainment using a regression discontinuity/kink design based on the federal Pell Grant formula. Each dollar of grant aid reduces loans by $1.80 among borrowers. We only find crowd-out of this magnitude in colleges that, like CUNY, "offer" no loan aid and require students to opt into borrowing. We develop and empirically support a model that shows opt-in or other fixed borrowing costs can lead grants to crowd out large amounts of loan aid, lowering some students attainment by reducing their liquid resources.

Scope of Project

JEL Classification:
      D14 Household Saving; Personal Finance
      I22 Educational Finance; Financial Aid
      I23 Higher Education; Research Institutions
      I26 Returns to Education
      J24 Human Capital; Skills; Occupational Choice; Labor Productivity

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Published Versions

V1 [2019-12-07]

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