Search

This paper uses cutbacks to a post-secondary funding program for Indigenous peoples in Canada to understand how changes in the costs of higher education affect the educational attainment and labour market outcomes of Indigenous groups. I exploit exogenous variation in exposure to student aid across cohorts and ethnicities to show that increasing the costs of post-secondary education not only affects post-secondary attainment but can also lead to a sizable decrease in high school graduation rates. After reductions in targeted student aid in the late 1980s, high school graduation rates declined by five percentage points on Indian reserves. I suggest that this finding is consistent with a model of human capital acquisition in which the return to a high school degree is low. In this framework, some students complete high school in order to attend a post-secondary institution. When post-secondary education is no longer affordable, some students may no longer find it worthwhile to complete high school. In the long-run, the program cutbacks had lasting adverse effects on labour supply. [ABSTRACT FROM AUTHOR]

Copyright of Canadian Public Policy is the property of University of Toronto Press and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)