Higher Education.

PositionProgram and Working Group Meetings

The NBER's Working Group on Higher Education met in Cambridge on November 13. The group's Director, Charles T. Clotfelter of NBER and Duke University, chose these papers to discuss:

Judith Scott-Clayton, Harvard University, "On Money and Motivation: A Quasi-Experimental Analysis of Financial Incentives for College Achievement"

Esteban Aucejo, Duke University; and Peter Arcidiacono and Hanming Fang, Duke University and NBER, "Does Affirmative Action Lead to Mismatch? A New Test and Evidence"

(For discussion of this paper, see p. 51)

Todd R. Stinebrickner, University of Western Ontario and NBER, and Ralph Stinebrickner, Berea College, "Learning about Academic Ability and the College Drop-out Decision"

Thomas Dee, Swarthmore College and NBER, "Stereotype Threat and the Student-Athlete"

Bruce A. Weinberg, Ohio State University and NBER, "Scientific Leadership,

Ginger Zhe Jin, University Of Maryland and NBER, and Alexander Whalley, University of California, Mercer, "The Power of Attention: Do Rankings Affect the Financial Resources of Public Colleges?" (NBER Working Paper No, 12941)

Programs that link substantial amounts of college financial aid to student achievement have proved increasingly popular in recent years. These programs could work either by relaxing financial constraints or by inducing additional student effort (or both). Scott-Clayton examines the PROMISE scholarship in West Virginia, which provides free tuition and fees to college students who maintain a minimum GPA and course load. Using an unusually comprehensive administrative database, she exploits discontinuities in both the eligibility formula and the timing of implementation to identify program effects. She finds robust and statistically significant effects on key academic outcomes, including a 6.7 percentage point increase in four-year BA completion rates among PROMISE recipients. These impacts are concentrated at the precise thresholds for annual scholarship renewal--particularly the minimum course load requirement--and disappear in the fourth year of college when students are still receiving the scholarship but no longer have the opportunity to renew. The findings suggest that the program works by establishing clear academic goals and incentives to meet them, rather than simply reducing the cost of college.

Although assumptions about how agents update subjective beliefs in response to the arrival of new information play a central role in models of decisionmaking, there is...

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