NBER study: Work Study positively effects college completion and employment

30 Jul

When students receive letters of acceptance from colleges, they must decide which college is the best fit for them. Given the tight economy, cost is a major consideration. Beckie Supiano and Elyse Ashburn wrote With New Lists, Federal Government Moves to Help Consumers and Prod Colleges to Limit Price Increases http://chronicle.com/article/Governments-New-Lists-on/128092/ in the Chronicle of Higher Education about the Department of Education’s new site about college costs. The College Affordability and Transparency Center http://collegecost.ed.gov/catc/Default.aspx is useful for students who are applying to college. It allows parents and students to calculate the costs of various college options. Once the costs of various college options are considered, then other considerations come into the decision.

For many students a major consideration is whether a college offers work study programs. College Data provides an overview of work study in How Work-Study Works:

How Do You Get Work-Study?
You apply for work-study just like you do all other forms of financial aid: by filling out and submitting the Free Application for Federal Student Aid (FAFSA). Your financial need usually determines the amount of work-study you are eligible for.
You find work-study jobs through job banks or postings by the financial aid or college employment offices. In most cases, students will have the opportunity to interview with potential work-study employers. The interviews help students and employers find out if the job is a good fit. Sometimes the college arranges these interviews; sometimes the student does. Even if you are eligible for work-study, there is no guarantee you’ll get a work-study job. In the end, whether or not you are hired is up to the employer.
Why Choose a Work-Study Job Over Regular Employment?
Taking a work-study job does not impact your financial aid eligibility. That is because the federal government does not count your work-study job earnings as income….
How Much Can You Earn?
The amount of your other financial aid usually determines how much aid is allocated to work-study. How much you can earn also depends on your class schedule and how well you’re doing academically. You should be realistic when working out your schedule and allow yourself time not only for study but also for recreational and leisure activities….
How Does Your Salary Get Paid?
Undergraduate students on work-study are paid by the hour and must be paid at least once a month. Your check will be sent directly to you to pay for your tuition, room, meals, or other college fees. Or, if you request it, your check can be sent directly to the college.
What Are Typical Work-Study Jobs?
If you get a work-study job on campus, the college will usually be your employer. Typical jobs include working in the library or bookstore, serving other students in the dining hall, and assisting with college events. Off-campus work usually benefits the public in some way and should relate as closely as possible to your course of study.
You may be working alongside other students not in the work-study program. In fact, in all respects your employment will appear the same as any other job. Only the college and your employer will know you’re a work-study student. The only difference between a regular part-time job and a work-study job is that part of your salary may be covered by the federal government, the state, your college, or some other organization…. http://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10083

Two Columbia University researchers concluded that work study correlates positively in helping student college completion rates.

Ken Button of Education Dive summarizes a NBER study which shows the effectiveness of college work study programs in Research shows college work-study programs generally benefit students:

Dive Brief:
• A new study by the National Bureau of Economic Research in Cambridge, MA, finds that college student employment subsidies provide generally positive effects on degree completion and employment.
• According to the study, the positive effects of employment subsidies are largest for lower-income students and students with lower SAT scores.
• According to the study, students enrolled in the largest employment subsidy program, Federal Work-Study, have a 3.2% improvement in bachelor degree completion six years later and a 2.4% improvement in employment six years later.
Dive Insight:
The study says that the academic improvements seem to be driven by the population of students who would have worked anyway, even without a student employment subsidy program. That’s because these students were able to work fewer hours, thanks to the subsidy, and apparently could devote more time to their studies. For students who would not have worked without the employment subsidy program, their grades declined in the first year of work study, but their graduation rates didn’t suffer and they enjoyed positive effects on their later employment.
http://www.educationdive.com/news/research-shows-college-work-study-programs-generally-benefit-students/291483/

Citation:

Should Student Employment Be Subsidized? Conditional Counterfactuals and the Outcomes of Work-Study Participation
Judith Scott-Clayton, Veronica Minaya
NBER Working Paper No. 20329
Issued in July 2014
NBER Program(s): ED LS
Student employment subsidies are one of the largest types of federal employment subsidies, and one of the oldest forms of student aid. Yet it is unclear whether they help or harm students’ long term outcomes. We present a framework that decomposes overall effects into a weighted average of effects for marginal and inframarginal workers. We then develop an application of propensity scores, which we call conditional-counterfactual matching, in which we estimate the overall impact, and the impact under two distinct counterfactuals: working at an unsubsidized job, or not working at all. Finally, we estimate the effects of the largest student employment subsidy program—Federal Work-Study (FWS)—for a broad range of participants and outcomes. Our results suggest that about half of FWS participants are inframarginal workers, for whom FWS reduces hours worked and improves academic outcomes, but has little impact on future employment. For students who would not have worked otherwise, the pattern of effects reverses. With the exception of first-year GPA, we find scant evidence of negative effects of FWS for any outcome or subgroup. However, positive effects are largest for lower-income and lower-SAT subgroups, suggesting there may be gains to improved targeting of funds.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Resources:

Five Ways to Cut the Cost of College
http://www.cnbc.com/id/41626500/Five_Ways_to_Cut_the_Cost_of_College

Secrets to paying for college http://money.cnn.com/2012/03/27/pf/college/tuition-costs.moneymag/index.htm

College Preparation Checklist https://studentaid.ed.gov/sites/default/files/college-prep-checklist.pdf

Federal Student Aid http://studentaid.ed.gov/resources

Related:

Choosing the right college for you https://drwilda.com/2012/04/15/choosing-the-right-college-for-you/

Many U.S. colleges use the ‘Common Application’ https://drwilda.com/tag/college-cost/

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