Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit

Abstract

H ow does cash-on-hand affect college enrollment decisions? A significant body of prior research has examined the impacts of family income on college enrollment (discussed more below), but it is unclear if cash transfers in the spring of the high school senior year, a time when many students are finalizing their college enrollment decisions, can also impact enrollment. On the one hand, students may face up-front, out-of-pocket costs that represent a barrier to entry for students from low-income families. In this case, additional cash-on-hand at the time of college enrollment decisions may have positive impacts on college attendance. On the other hand, college preparedness and preferences for college enrollment may be entirely determined prior to spring of the high school senior year. In this case, additional cash-on-hand at the time when students and families make college enrollment decisions may have no impact on these decisions. Quantifying the causal effects of cash-on-hand is challenging because cash-on-hand at the time of college enrollment decisions can be correlated with longer term disadvantages that leave students less academically qualified for college.In this paper, we implement a novel research design to estimate the effects of cash-on-hand on college enrollment decisions. We exploit quasi-experimental variation in tax refunds received during the spring of the high school senior year. The

Work‐Limiting Disability and Intergenerational Economic Mobility

“…Second-generation decisions such as educational attainment could feasibly be related to this constrained budget. For example, Manoli and Turner (2018) found that higher tax refunds in low-income families had a positive impact on high school seniors' college enrollment the following semester-suggesting relaxing budget constraints could increase educational attainment. More broadly, children of parents in poorer health are more likely to drop out of high school, and conditional on transitioning to college, less likely to complete their degree (Boardman et al, 2012).…”

Distributing the Green (Cards): Permanent Residency and Personal Income Taxes after the Immigration Reform and Control Act of 1986

“…On the one hand, there would have been deadweight loss involved in this redistribution. On the other, mounting evidence suggests that the social benefits from childhood exposure to the EITC -manifested in improved health at birth (Hoynes, Miller, and Simon, 2015), higher test scores (Dahl and Lochner, 2012), and higher levels of educational attainment (Bastian and Michelmore, 2017;Manoli and Turner, 2018) -would have been more than enough to compensate. And indeed, recent work suggests that childhood exposure to other social programs, such as food stamps (East, 2014) and public health insurance (Bronchetti, 2014), is particularly beneficial for immigrants.…”

“…The additional family income from the EITC lifts large numbers of children out of poverty every year (Short, 2014). Previous research has also found that it improves health at birth (Hoynes, Miller, and Simon, 2015) and the test scores (Dahl and Lochner, 2012), college enrollment rates (Manoli and Turner, 2018), and educational attainment and earnings (Bastian and Michelmore, 2017) of older children. 5 Most of the "fiscal burden" of immigration is state and local, due largely to enrollment of immigrants in public schools (National Academy of Sciences, 2016).…”

In‐Work Credits in the UK and the US

“…60 Chetty, Friedman and Rockoff, 2011;Dahl and Lochner, 2012. 61 Bastian and Michelmore, 2018;Manoli and Turner, 2018.…”