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Merit aid (for college students)

Higher Education
  Literature review updated December 2016.

Undergraduate students receive merit aid based on prior academic achievement, such as SAT/ACT scores or high school grade point average. Students may be able to renew their merit aid awards each year if they continue to reach certain academic benchmarks. Merit aid rewards students for past achievements and encourages them to continue meeting high academic standards. Merit aid for college students focuses on the effects of merit aid for those already enrolled in college. In this meta-analysis, effects on 2-year graduation and transfer from 2-year to 4-year college were based on a single study focusing on 2-year institutions.
 
ALL
META-ANALYSIS
CITATIONS

*The effect size for this outcome indicates percentage change, not a standardized mean difference effect size.

Meta-analysis is a statistical method to combine the results from separate studies on a program, policy, or topic to estimate its effect on an outcome. WSIPP systematically evaluates all credible evaluations we can locate on each topic. The outcomes measured are the program impacts measured in the research literature (for example, impacts on crime or educational attainment). Treatment N represents the total number of individuals or units in the treatment group across the included studies.

An effect size (ES) is a standard metric that summarizes the degree to which a program or policy affects a measured outcome. If the effect size is positive, the outcome increases. If the effect size is negative, the outcome decreases. See Estimating Program Effects Using Effect Sizes for additional information on how we estimate effect sizes.

The effect size may be adjusted from the unadjusted effect size estimated in the meta-analysis. Historically, WSIPP adjusted effect sizes to some programs based on the methodological characteristics of the study. For programs reviewed in 2024 or later, we do not make additional adjustments, and we use the unadjusted effect size whenever we run a benefit-cost analysis.

Research shows the magnitude of effects may change over time. For those effect sizes, we estimate outcome-based adjustments, which we apply between the first time ES is estimated and the second time ES is estimated. More details about these adjustments can be found in our Technical Documentation.

Meta-Analysis of Program Effects
Outcomes measured No. of effect sizes Treatment N Effect sizes (ES) and standard errors (SE) Unadjusted effect size (random effects model)
ES SE Age ES p-value
Employment
Any employment, including part-time work.
0 3 12122 -0.007 0.018 26 -0.007 0.711
Earnings*
Percent change in labor market earnings, typically weekly or monthly wages.
0 3 12122 0.040 0.021 26 0.040 0.056
Graduate with 4-year degree
Graduate with a degree from a 4-year higher education institution.
 0 4 14059 0.149 0.057 23 0.149 0.009
College grade point average
Grade point average in a higher education institution.
 0 5 21120 0.028 0.014 23 0.029 0.040
Graduate with 2-year degree
Graduate with a degree from a 2-year higher education institution.
 0 1 9518 0.077 0.280 21 0.077 0.783
Transfer from 2- to 4-year college
Enroll in a 4-year higher education institution.
 0 1 11898 0.042 0.273 22 0.042 0.878

Citations Used in the Meta-Analysis

Binder, M., & Ganderton, P.T. (2002). Musical chairs in higher education: Incentive effects of a merit-based state scholarship program. Working paper, Department of Economics, Albuquerque: The University of Mexico.

Lee, J. (2014). Does merit-based aid promote degree attainment? Unpublished manuscript.

Scott-Clayton, J. E. & Zafar, B. (2016). Financial aid, debt management, and socioeconomic outcomes: Post-college effects of merit-based aid. (NBER Working Paper 22574). Cambridge, MA: National Bureau of Economic Research.

Scott-Clayton, J. (2011). On money and motivation: A quasi-experimental analysis of financial incentives for college achievement. Journal of Human Resources, 46(3), 614-646.

Welch, J.G. (2015). Three essays on the economics of higher education: How students and colleges respond to financial aid programs (Unpublished doctoral dissertation). Knoxville, TN: University of Tennessee-Knoxville.