Research

The Impact of Merit-Based Scholarships on Student Outcomes: Evidence from Ontario

Merit-based scholarships have long been used by colleges as a way to make post-secondary education more attractive and accessible to students. Despite their widespread use, empirical evidence on the effectiveness of such scholarships in achieving these objectives remains limited. This study employs a fuzzy regression discontinuity design to evaluate the impact of a large, lump-sum merit-based entrance scholarship on the yield rates of domestic undergraduate students at the University of Toronto. The findings indicate that the scholarship has no statistically significant effect on the likelihood of students accepting their admission offers. However, a heterogeneity analysis reveals a positive effect on yield rates among students from lower-income neighborhoods and those residing farther from the University of Toronto, highlighting the potential benefits of a more targeted scholarship design. Furthermore, the analysis suggests that a student’s prior preference for the institution influences their responsiveness to scholarship incentives. This finding underscores the persistence of college preferences and raises questions about the efficacy of merit-based scholarships in shaping enrollment decisions.

The Grade Recession: Grade Inflation in the Public Education Market