Document Author: James Benson
Putting College First: How Social and Financial Capital Impact Labor Market Participation Among Low‐Income Undergraduates (2011)
Most undergraduates work despite evidence that working while in college is associated with lower
rates of degree completion. Prior research indicates that the propensity to work varies by both family
income and education, suggesting that both financial and social capital operate to reduce work and
preserve educational advantage. We test that hypothesis with a sample of 3,000 low‐income
Wisconsin undergraduates enrolled in the state’s 42 public two‐year and four‐year colleges and
universities. Leveraging an experiment that distributes financial aid via lottery, we identify effects of
financial capital on labor force participation that are comparable in magnitude to the positive benefits
of social capital obtained through parental education. Specifically, the allocation of additional financial
aid reduces the hours worked by low‐income students with high school‐educated parents to the point
that it nearly fully offsets the socioeconomic advantage (in terms of fewer hours worked) that accrues
to students from college‐educated families. Need‐based financial aid, it appears, may be an equalizer
that promises to reduce labor force participation and enhance college attainment.
Working for College: The Causal Impacts of Financial Grants on Undergraduate Employment (2016)
One way in which financial aid is thought to promote college success is by minimizing the time students
spend working. Yet, little research has examined if this intended first-order effect occurs, and results
are mixed. We leverage a randomized experiment and find that students from low-income families in
Wisconsin offered additional grant aid were 5.88 percentage points less likely to work and worked 1.69
fewer hours per week than similar peers, an 8.56% and 14.35% reduction, respectively. Students
offered the grant also improved qualitative aspects of their work experiences; they were less likely to
work extensively, during the morning hours, or overnight. Grant aid thus appears to partially offset
student employment, possibly improving prospects for academic achievement and attainment.
Reducing Income Inequality in Educational Attainment: Experimental Evidence on the Impact of Financial Aid on College Completion (2016)
Income inequality in educational attainment is a long-standing concern,
and disparities in college completion have grown over time.
Need-based financial aid is commonly used to promote equality in
college outcomes, but its effectiveness has not been established, and
some are calling it into question. A randomized experiment is used to
estimate the impact of a private need-based grant program on college
persistence and degree completion among students from low-income
families attending 13 public universities across Wisconsin. Results indicate
that offering students additional grant aid increases the odds of
bachelor’s degree attainment over four years, helping to diminish income
inequality in higher education.