Promise scholarship programs as place-making policy: Evidence from school enrollment and housing prices

doi:10.1016/j.jue.2017.06.001

Journal of Urban Economics

Volume 101, September 2017, Pages 74-89

https://doi.org/10.1016/j.jue.2017.06.001 Get rights and content

Abstract

Place-based “Promise” scholarship programs—which guarantee financial aid for qualifying graduates of a school district—have proliferated in recent years. Using data from multiple sites, we compare the evolution of school enrollment and residential real estate prices around program announcement dates within Promise-eligible and surrounding areas. While our estimates indicate that enrollment increased following Promise announcements, merit-based programs generated relative increases in white enrollment. Housing prices respond strongly in neighborhoods with better primary schools and in the upper half of the housing price distribution. We conclude that these programs have important and under-studied distributional considerations.

Section snippets

Related literature

In addition to informing policy, our findings contribute to two different strands of literature. First among these is the substantial body of work regarding the provision of financial aid. Dynarski (2002) reviews the recent quasi-experimental literature on the topic and concludes that financial aid significantly increases the likelihood that an individual attends college. Her estimates indicate that lowering the costs of college attendance by $1000 increases attendance by roughly 4 percentage

Data and methodology

Our estimation strategy for measuring the impact of the Promise treats the announcement of a Promise program in a region as a natural experiment, relying on the assumption that each announcement was unexpected. To support this assumption, we conducted substantial research into the timing of program announcements in each area that we study. For every program included in the analysis, we were able to contact staff within the organization responsible to establish an announcement date. We also

Results

We first address the results from the K-12 enrollment data, which apply to a broad sample of Promise scholarship programs. We then follow with evidence of the impact of selected Promise scholarship programs on local housing markets. Finally, we present a more detailed housing market analysis for two large metropolitan Promise programs—Pittsburgh and Denver.

Conclusion

Place-based “Promise” scholarship programs have proliferated in recent years. Typically implemented at the school district level and financed privately, they guarantee financial aid to eligible high school graduates from a particular school district, provided they have continuously resided in the district for a number of years. In this study, we measure the impact of a cross-section of Promise scholarships on a range of policy-relevant outcomes, including public school enrollment and housing

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^☆: The authors thank Sue Dynarski, Doug Harris, Allison Shertzer, Werner Troesken, and Lise Vesterlund for their helpful comments. In addition, the authors are grateful to participants at the 2013 Midwest Economics Association Meeting, the 2014 APPAM Fall Research Conference, the Center for Race and Social Problems seminar series, and the University of Pittsburgh Applied Micro Brown Bag seminar series. All views expressed herein belong to the authors alone and do not necessarily reflect the views of the Federal Trade Commission or any of its Commissioners. Any remaining errors are their own.

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Promise scholarship programs as place-making policy: Evidence from school enrollment and housing prices☆

Abstract

Section snippets

Related literature

Data and methodology

Results

Conclusion

Econ. Educ. Rev.

J. Environ. Econ. Manag.

Place-based College Scholarships: An Analysis of Merit and Universal Programs

Technical Report

The Kalamazoo promise, and enrollment and achievement trends in Kalamazoo public schools

Proceedings of the 2010 PromiseNet Conference

The Effects of the Kalamazoo Promise Scholarship on College Enrollment, Persistence, and Completion

Technical Report 15-229

The short-term effects of the Kalamazoo Promise scholarship on student outcomes

Migration and Housing Price Effects of Place-Based College Scholarships

Technical Report 15-245

Do better schools matter? parental valuation of elementary education

Q. J. Econ.

Dealing with limited overlap in estimation of average treatment effects

Biometrika

Into college, out of poverty? policies to increase the postsecondary attainment of the poor.

The behavioral and distributional implications of aid for college.

Am. Econ. Rev.

Fulfilling the Pittsburgh Promise: Early Progress of Pittsburgh’s Postsecondary Scholarship Program

Technical Report

The economics of place-making policies

Brook. Pap. Econ. Act.

A Second Look at Enrollment Changes after the Kalamazoo Promise

Technical Report 13-200

The impact of the Kalamazoo Promise on teachers: expectations for students

Technical Report 5