does merit based aid increase college attendance? nope

Jashua Goodman (Columbia) considers the impact of Massachusetts' Adam Scholarship on college attendance decisions. The Adam Scholarship is a state-funded, merit-based financial aid program similar to those found in most other states. His findings are interesting, mostly because the program appears to have little effect on college attendance decisions.

From the abstract: "most funds flowed to students who would have enrolled in public colleges absent the scholarship and the aid had no effect on winners' overall college enrollment rate, which already exceeded 90%." He also finds that the scholarship "induced 6% of winners to choose four-year public colleges instead of four-year private colleges;" an effect which does not increase overall college attainment. He concludes,

The Adams Scholarship would annually add 80 college-educated workers to the state's workforce, at an annual cost of $50,000 per added worker. It seems implausible that the benefits to the state in additional tax revenue would exceed this amount, or that the proportion of college-educated workers would rise enough to induce the [previously claimed benefits].

Download the paper, which was recently published in the Journal of Public Economics.