Panel Paper: The Impact of Pell Grants on College Choice, Completion and Student Earnings: Evidence from the Administrative Data Covering the Universe of Federal Aid Recipients

Friday, November 3, 2017
Columbian (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Jordan D Matsudaira, Cornell University


The Pell Grant program is the largest federal program aimed at promoting mobility by improving the college access and success of low-income Americans. Unfortunately, the literature on the impact of the Pell program has shown disappointing results. An early wave of studies focused on the introduction of Pell found that it did not increase the college going rates of low income students relative to higher income students. More recent studies have relied on more robust research designs using administrative data from several state higher education systems, and with one notable exception have found little evidence of positive effects of Pell receipt on students' outcomes. This paper provides a new evaluation of the impact of Pell using a research design based on discontinuities and kinks in the relationship between average Pell grant receipt and family incomes, and employing a unique dataset covering the universe of federal aid recipients starting at a college between 2002 and 2014 (over 40 million students). These data are used to estimate the effect of Pell receipt on college choice, completion, and earnings measured 10 years after enrollment. I explore heterogeneity in these impacts by student characteristics, sector (e.g., level and control of the institution), and measures of college quality.