Working Papers
The Effects of Losing Pell Grant Eligibility on Student Outcomes (Job market paper) Link
Third Way (Published July 2025) Available here
Abstract: This paper examines the effects of Pell Grant eligibility on student outcomes using a Regression Discontinuity (RD) design. While initial eligibility is solely determined by financial need, students must achieve Satisfactory Academic Progress (SAP) to retain the grant. Students eligible for higher aid are less likely to persist in college when they lose eligibility compared with those with lower aid. This non-random attrition introduces selection bias in the Local Average Treatment Effects (LATE). To address this bias, I construct nonparametric bounds on LATE under two monotonicity assumptions. While naive RD estimates find no effect on completion rates, bound estimates reveal that students eligible for higher aid are up to 4 percentage points more likely to graduate from a 4-year institution within four years compared with those with less aid. In the worst case, they are still up to 2 percentage points more likely to graduate within four years. These positive effects are larger than those found in earlier studies.
Presented at: WEAI 2024, SEA 2024, ASSA 2025
The Effects of Student Borrowing on Post-College Outcomes
Abstract: This paper examines the effects of student borrowing on post-college outcomes using a fuzzy regression kink design. Using a nationally representative sample of bachelor's degree recipients, the study finds that a 1 percent increase in subsidized loans leads to a 0.07 percent increase in earnings one year after graduation for students in STEM fields. This positive effect persists for up to four years after graduation, with a 0.07 percent earnings increase. In contrast, no significant wage effects are observed for students in non-STEM fields. Furthermore, the study reveals negligible effects on debt repayment: increased borrowing does not significantly affect loan default, deferment, or forbearance rates among students in either STEM or non-STEM fields.
The Effect of Grade Inflation on the Wages of Students Entering the Labor Market
Accepted, Education Economics
Abstract: This paper documents rising college grades and how the relationship between grades and the wages of students entering the labor market has changed between 2001 and 2017. The decomposition analysis yields two main results. First, diminishing marginal returns to GPAs are observed across the wage distribution, which is particularly pronounced for non-STEM majors. For STEM majors, GPAs have a negligible impact on wages, except for those with exceptionally high GPAs. Second, changes in the returns to GPAs accounted for a larger portion of wage differentials, rather than changes in GPAs. Overall, the results suggest that grade inflation may weaken the signaling power of grades, potentially explaining the reduced returns to higher GPAs among non-STEM majors.
Presented at: MEG 2023, MEA 2024, AEFP 2024
The Demographics of Reservation Wages: A Comprehensive Review of Administrative Data'' (with Chad D. Cotti and Peter F. Orazem)
Cited in 2025 Economic Report of the President.
Abstract: This paper examines reservation wage-setting behavior among unemployed workers, using U.S. Unemployment Insurance administrative data from 2000 to 2022. Consistent with optimal job search, we find that reservations wages rise with unemployment benefits and fall as the duration of the unemployment spell rises. Reservation wages fall in times of high unemployment, an expected response to the falling arrival rate of job offers. Reservation wages rise with education, age, and the prior wage, results that would be expected if human capital raises the value of market time more than nonmarket time. The same stylized results hold across ages, genders, and races. The average reservation wage is set 25% below the prior wage with the largest discounts found for young workers, women, Blacks, and the least educated. During the pandemic period when weekly benefits were increased for all unemployed, the reservation wages rose most for unemployed at the lower tail of the wage distribution who gained the most proportionally from the enhanced benefit.
Drafts available upon request