WSW: A Scholarship Program's "Bang For The Buck"

Mar 24, 2016

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Credit WMUK

Upjohn Institute for Employment Research Economist Tim Bartik says the Kalamazoo Promise has provided a natural experiment of how scholarship programs work. 


Bartik and fellow Upjohn Institute researchers Brad Hershbein and Marta Lachowska recently released a report that studied data about whether students went to college, what colleges they attended and if they graduated to determine the cost and benefits of a universal scholarship program like the Kalamazoo Promise. Bartik and Hershbein joined WMUK's Gordon Evans. 

Hershbein says the research shows a boost in college graduation rates for Kalamazoo Public School graduates. He says there was a larger increase in college graduation rates for students of color. And the graduation rates increase more for women than for men.

Bartik says the Promise is showing high returns in terms of increased career earnings for those who receive the scholarships. He says it also “moves the needle” on the college graduation rate. But Bartik says it’s a “glass half full, glass half empty" situation because many students are still not graduating from college. Hershbein says it shows there are many hurdles to moving students to college and on to graduation.

Many other communities across the country have been developing their own scholarship programs to help pay for college. Hershbein says not every city has donors who can provide the money needed for a program like the Kalamazoo Promise. But he says the research shows that a universal scholarship program is effective. Bartik says even though the Kalamazoo Promise isn’t targeted based on need, their study shows its effective for students of color and for low income students. 

The value of a college education

As Bartik and Hershbein worked on their research about the Kalamazoo Promise, they stumbled upon a surprising finding. They discovered that a college degree isn’t worth as much for someone who grew up poor as it is for someone from a wealthy background.

Hershbein says someone who came from a family who qualified for free or reduced school lunch earning a bachelor’s degree earned about 90% more over their career. For someone who didn’t come from such a family earning a college degree was worth about 160%. “That adds up to a lot of dollars.”

Bartik says college still pays off, and he says it doesn’t say anything about any individual person. Bartik says it’s not surprising to find that growing up poor affects earnings, because everything in your background can have an impact on earnings. But Bartik says “on average it seems as if, growing up in a low income background seems to handicap the return on college.”

Hershbein says the research shows that a universal scholarship program may help address those differences. But he says it’s not the only solution. Hershbein says it’s important for more research to discover the cause of that difference in earnings for college graduates based on background. He says that could lead to discussions about policy changes to address inequality.

Preschool Education

Bartik has written two books on the economic benefits of high quality preschool. Recently, he wrote more about the issue after participating in a forum at the American Enterprise Institute. Bartik says there is enough evidence now to boost investment in high quality preschool. He says the big question is teacher pay. Bartik says more research should be done on what skills developed in preschool determine adult success. But he says there’s no reason to keep waiting. “There are two types of errors in public policy. One error is going too far, and the other error is not doing enough.”

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