Working for College: The Causal Impacts of Financial Grants on Undergraduate Employment

Abstract

One way in which financial aid is thought to promote college success is by minimizing the time students spend working. Yet, little research has examined if this intended first-order effect occurs, and results are mixed. We leverage a randomized experiment and find that students from low-income families in Wisconsin offered additional grant aid were 5.88 percentage points less likely to work and worked 1.69 fewer hours per week than similar peers, an 8.56% and 14.35% reduction, respectively. Students offered the grant also improved qualitative aspects of their work experiences; they were less likely to work extensively, during the morning hours, or overnight. Grant aid thus appears to partially offset student employment, possibly improving prospects for academic achievement and attainment.