Do risk aversion and wages explain educational choices?

Brodaty, Thomas; Gary-Bobo, Robert; Prieto, Ana Teresa

doi:10.1016/j.jpubeco.2014.05.003

Cited by 29 publications

(21 citation statements)

References 29 publications

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“…5 Notable exceptions include Arcidiacono, Sieg, and Sloan (2007) and Brodaty, Gary-Bobo, and Prieto (2014), who allow for heterogeneous discount factors and relative risk aversion, respectively. preferences plays a central role in explaining the willingness-to-pay for higher education financial aid.…”

Section: Background Literature and Contributionsmentioning

confidence: 99%

Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment

Belzil¹,

Maurel²,

Sidibé³

2017

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Using data from a Canadian field experiment designed to elicit risk and time preferences and quantify financial barriers to higher education, we estimate the distribution of the value of financial aid for prospective students, and relate it to parental socio-economic background, individual skills, risk and time preferences. Our results point to credit constraints affecting a sizable share of prospective students. We find that most of the individuals are willing to pay a sizable interest premium above the prevailing market rate for the option to take-up a loan, with a median interest rate wedge equal to 6.6 percentage points for a $1,000 loan. The willingness-to-pay for financial aid is also highly heterogeneous across students, with preferences, in particular discount factors, playing a key role in accounting for this variation.

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Section: Background Literature and Contributionsmentioning

confidence: 99%

Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment

Belzil¹,

Maurel²,

Sidibé³

2017

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“…Examples of such programs include the Veterans' educational benefits (Angrist, 1993;Stanley, 2003;Turner, 2002, 2003), the Social Security Student Benefit Program (Dynarski, 2003) and a variety of state merit-based 1 The importance of college costs in students' educational choices is further emphasized in models that take into account the role of risk aversion in the demand for education (Brodaty et al, 2012).…”

Section: Francementioning

confidence: 99%

Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program

Fack

Grenet

2015

American Economic Journal: Applied Economics

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Using comprehensive administrative data on France's single largest financial aid program, this paper provides new evidence on the impact of large-scale need-based grant programs on the college enrollment decisions, persistence and graduation rates of low-income students. We exploit sharp discontinuities in the grant eligibility formula to identify the impact of aid on student outcomes at di↵erent levels of study. We find that eligibility for an annual cash allowance of 1,500 euros increases college enrollment rates by up to 5 percentage points. Moreover, we show that need-based grants have positive e↵ects on student persistence and degree completion.JEL Classification: H52, I22, I28, J24, J38

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“…Manacorda (2012) applies a regression discontinuity approach to Uruguayan junior high-school data and finds negative effects on the dropout rate. In France, contributions on this topic (with a causal approach) are due to Mahjoub (2007), d 'Haultfoeuille (2010), Brodaty, Gary-Bobo, and Prieto (2012, 2014, and Alet, Bonnal, and Favard (2013). Among these authors, d'Haultfoeuille (2010) applies a new nonparametric method for the estimation of treatment effects to French primary education data and also finds positive effects.…”

Section: Introductionmentioning

confidence: 99%

Grade retention and unobserved heterogeneity

Gary-Bobo

Goussé²,

Robin

2016

Quantitative Economics

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We study the treatment effect of grade retention using a panel of French junior high-school students, taking unobserved heterogeneity and the endogeneity of grade repetitions into account. We specify a multistage model of human-capital accumulation with a finite number of types representing unobserved individual characteristics. Class-size and latent student-performance indices are assumed to follow finite mixtures of normal distributions. Grade retention may increase or decrease the student's knowledge capital in a type-dependent way. Our estimation results show that the average treatment effect on the treated (ATT) of grade retention on test scores is positive but small at the end of grade 9. Treatment effects are heterogeneous: we find that the ATT of grade retention is higher for the weakest students. We also show that class size is endogenous and tends to increase with unobserved student ability. The average treatment effect of grade retention is negative, again with the exception of the weakest group of students. Grade repetitions reduce the probability of access to grade 9 of all student types.

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Do risk aversion and wages explain educational choices?

Cited by 29 publications

References 29 publications

Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment

Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment

Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program

Grade retention and unobserved heterogeneity

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