Panel Paper:
Parental Resources and College Attendance: Evidence from Lottery Wins
Friday, November 3, 2017
Haymarket (Hyatt Regency Chicago)
*Names in bold indicate Presenter
We examine more than one million children whose parents won a state lottery to trace out the effect of additional household resources on college attendance. The analysis links the universe of federal tax records to federal financial aid records and leverages substantial variation in the size and timing of wins. The results reveal modest, increasing, and only weakly concave effects of resources on the transition to college: moderate sized wins have little effect (e.g., wins less than $100,000 increase attendance by less than 1 percentage point) while large wins that exceed the cost of college reveal a high upper bound (e.g., wins over $1,000,000 increase attendance by 10 percentage points). The effects are smaller among low-SES households and, while lottery wins reduce financial aid, attendance patterns are not moderated by this crowd-out. Overall, the results suggest that households derive consumption value from college and, in the current policy environment, credit constraints do not inhibit attendance for a significant fraction of households.
Full Paper:
- Lottery_August_2017.pdf (672.4KB)
