State Merit Aid Programs and College Major: A Focus on STEM

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Since 1991 more than two dozen states have adopted merit-based student financial aid programs, intended at least in part to increase the stock of human capital by improving the knowledge and skills of the state's workforce. At the same time, there has been growing concern that the U.S. is producing too few college graduates in science, technology, engineering, and mathematics (STEM) fields. Using both microdata from the American Community Survey and student records from the University System of Georgia, this paper examines whether recently adopted state merit-aid programs have affected college major decisions, with a focus on STEM fields. We find consistent evidence that state merit programs did in fact reduce the likelihood that a young person in the state will earn a STEM degree.JEL Classification: I23, J24

STEM graduates, human capital externalities, and wages in the U.S.

“…Policies that encourage historically underrepresented groups to major in STEM fields may be able to increase the stock of STEM graduates and serve other social goals. Finally, there is evidence that some potential STEM students respond to incentives provided by financial aid programs (Denning and Turley 2013;Sjoquist and Winters 2013). Scholarship programs specifically targeted to STEM fields may be able to increase STEM education for students at the margin of majoring in STEM or not.…”

HOPE for community college students: The impact of merit aid on persistence, graduation, and earnings

“…On the other hand, Castleman and Long (2013) and Sjoquist and Winters (2014a) find that aid had no impact on students earning an associate's degree by studying FSAG eligibility and the Georgia HOPE scholarship, respectively. Other studies have also considered whether merit aid programs affect major choice and have found that students are less likely to pursue majors in science, technology, engineering, and math (STEM) fields due to the introduction of merit aid programs (Cornwell, Lee, & Mustard, 2006;Sjoquist & Winters, 2014b). While some of these studies do include community college students and four-year students in their sample, none have yet focused exclusively on community college students or examined post-college earnings.…”

The Effect of University Fees on Applications, Attendance and Course Choice: Evidence from a Natural Experiment in the UK

“…They find that students responded to the reduction in debt by choosing lower‐salary jobs, although they do not find an effect on the choice of major or on academic performance. In two related studies, Sjoquist and Winters (,b) look at the effect of financial aid on the probability of graduating from a STEM subject. They use variation in financial aid across US states, and find that the adoption of a strong aid programme had a negative effect on the number of STEM graduates.…”