The Effect of Grants on University Drop-Out Rates: Evidence on the Italian Case
36 Pages Posted: 9 Jul 2019
Date Written: September 27, 2018
In this paper we measure the impact of need-based grants on university dropout rates in the first year, using student-level data from all Italian universities in the period 2003-2013. In Italy, some of the students eligible for grants do not receive them due to a lack of funds. We exploit this phenomenon to identify the causal effect of financial assistance. We find that need-based aid prevents students belonging to low-income families from dropping out from higher education; the estimated effect is sizeable. This evidence is robust to a variety of specifications and sample selection criteria.
Keywords: human capital, higher education, university dropout, student financial aid, treatment effect model, Italy
JEL Classification: I22, I23, C21, C35
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