September 2015

IZA DP No. 9371: The Effects of State Merit Aid Programs on Attendance at Elite Colleges

published in: Southern Economic Journal, 2016, 83 (2), 527-549

State merit aid programs have been found to reduce the likelihood that students attend college out-of-state. Using the U.S. News & World Report rankings of colleges and universities to measure college quality and Integrated Postsecondary Education Data System data to measure enrollment, we explore how this reduction in out-of-state enrollment differs by the academic quality of the institution. Our results suggest that state merit aid programs do not reduce the likelihood that a student attends a top ranked school, but that these programs do reduce the likelihood of enrolling at less prestigious out-of-state schools, with generally larger effects the lower the ranking of the schools.