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ERIC Number: ED508960
Record Type: Non-Journal
Publication Date: 2008-Jan-17
Pages: 29
Abstractor: As Provided
Reference Count: 60
ISBN: N/A
ISSN: N/A
Estimating the Influence of Financial Aid on Student Retention: A Discrete-Choice Propensity Score-Matching Model
Herzog, Serge
Education Working Paper Archive
The greatest limitation in establishing causality in observational studies on the effect of financial aid is the presence of endogeneity or selection bias associated with aid status. To control for this statistical confoundedness that besets the research corpus to date, this study estimates the effect of financial aid on freshmen retention at a moderately selective, public university using propensity score-matching in multi-stage regression analyses. The correlational pattern that emerged from twenty-four logit models suggests higher-income students accrue a retention benefit from financial aid, unlike low-income students, net of first-year academic experience and type and amount of aid received. Conversely, retention of low-income freshmen is more likely due to academic performance compared to those from high-income background. Findings on the effect of aid are consistent with the economics of moral hazard and unobservable behavior. (Contains 6 footnotes, 8 tables, and 2 figures.)
Education Working Paper Archive. Department of Education Reform, University of Arkansas, 201 Graduate Education Building, Fayetteville, AR 72701. Tel: 479-575-3172; Fax: 479-575-3196; e-mail: edreform@uark.edu; Web site: http://www.uark.edu/ua/der/EWPA
Publication Type: Reports - Research
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: University of Arkansas, Education Working Paper Archive