Targeted scholarship for higher education and academic performance: Evidence from Indonesia.

This paper studies the effect of a large-scale scholarship introduced by the Indonesian government in 2010 that provides generous financial assistance for poor students. By using administrative data from a large public university in Indonesia, this study estimates the likely effect of the scholarship on student academic performance during university. Using matching methods of coarsened exact matching (CEM) that take into account the selection criteria used for scholarship allocation, we find that the scholarship is positively associated with student performance in terms of GPA. Furthermore, we find that these positive associations are strongest for the least advantaged group in terms of family income. • BIDIKMISI is a large-scale scholarship from the Indonesian government for poor university students. • The targeting is effective as the majority of the recipients were students from poor families. • The administrative data and matching methods provide estimations of the effect of scholarship. • We find that the scholarship positively impacts student performance in terms of GPA. • The effects are strongest for the least advantaged group in terms of family income. [ABSTRACT FROM AUTHOR]