Search

A concern in higher education policy is that students are taking longer to graduate. One possible reason for this observation is an increase in off-campus labor market participation among college students. Financial aid may play a role in the labor/study choice of college students-as college becomes more affordable, students may substitute away from work and toward increased study. I use data from the National Postsecondary Student Aid Study (NPSAS) to exploit nonlinearity in the Pell Grant formula to estimate a regression kink and regression discontinuity designs. I find that conditional on receiving the minimum of $550, students reduce their labor supply by 0.4 hours per week, which translates to a 2.4 percent decrease in hours worked. Students who receive the average Pell Grant of $2,250 are 7.6 percentage points (or around 12 percent) less likely to work and, if working, supply 5.10 less hours per week, or around a 30.67 percent reduction. I find Pell Grants do increase academic achievement, implying that students substitute study time for work.

The permanent income hypothesis states that agents perfectly smooth consumption given a large, anticipated shock to income. Testing these implications is difficult given the endogenous nature of income and payment timing. We leverage exogenous variation in military bonus size and timing matched with donations from a large workplace charitable drive where soldiers contribute via payroll deductions during a fixed open enrollment period. Our findings suggest that soldiers are 5 to 10 percent more likely to contribute if they receive their bonus during the open enrollment period. We show that soldiers smooth donations more with age and increased bonus experience.

In 2010, Congress reauthorized the Post-9/11 GI Bill by changing reimbursement rates from widely-varying by-state maximums to a nationwide limit. This policy created exogenous variation in the changes in reimbursement rates in direction and magnitude for veterans at private universities. We leverage this variation to examine for-profit college responses to changes in reimbursement rates. We detect tuition responses only for for-profit colleges, where we estimate a one percent pass-through rate. This for- profit response is driven by colleges in states that saw decreased benefits, colleges with higher concentrations of veterans, and colleges whose pre-change tuition was above the state maximum but below the since-increased nationwide level; the last group has a pass-through rate of eight percent. This policy also caused declines in non-veteran populations showing a substitution towards veteran students.