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GSE Colloquium Series: Lesley Turner

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GSE Colloquium Series: Lesley Turner

Monday, November 5, 2018
10:00am
EDUC 114

ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare

Lesley Turner, Assistant Professor of Economics, University of Maryland

Federal and state governments provide substantial financial support to college students in the United States in the form of need-based grant aid. While many studies have studied the effect of grant aid on student outcomes, less is known about the social return to these expenditures. In this paper, my coauthors and I provide evidence on the effects of the additional grant aid on low-income students' contemporaneous and longer-run academic and labor market outcomes. Using administrative data from Texas public colleges and a discontinuity in the generosity of federal Pell Grant aid based on family income, we show that eligibility for additional grant aid at college entry (approximately $700, on average) leads to significant educational attainment and earnings gains for first-time, bachelor’s degree seeking students. Beginning four years after college entry, degree completion rates increase by approximately 10 percent, and this increase lasts for the duration of our panel, up to seven years after college entry. Students experience corresponding increases in earnings of approximately 4 percent over the seven years after entry. Eligibility also increases the total amount of grant aid received during college, an added social cost arising from behavioral responses of students (who take more courses) and of schools (which target eligible students with additional state grant aid). Nonetheless, we show that effects on imputed tax receipts are sufficiently large that the government should fully recover the additional grant expenditures within ten years. In contrast, we find consistently smaller, insignificant effects of additional grant aid on returning bachelor’s degree-seeking students’ outcomes.

Lesley J. Turner is an Assistant Professor of Economics at the University of Maryland, faculty research fellow of the National Bureau of Economic Research, CESifo research affiliate, and a faculty associate of the Maryland Population Research Center. Her research broadly considers the roles that government should play in providing and financing education. Recent projects examine how incentives built into the structure of higher education financing affect students and colleges, and the implications these responses have for students’ educational outcomes, loan debt, and labor market outcomes. Dr. Turner graduated from a joint BA/MPP program at the University of Michigan in 2005, received her PhD in Economics from Columbia University in 2012, and was awarded the CESifo Distinguished Young Affiliate Prize in 2015.

Event Details


Contact Information


Contact Name 
Tamara Danoyan
Contact Phone 
(650) 725-0703
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