Equity and Efficiency in Financial Aid Targeting

In public finance models, a planner allocates transfers to balance equity–efficiency trade-offs. These are central in higher education, where targeting combines SES and academic ability. We study how financial aid targeting affects equity and efficiency by comparing incidence, treatment effects, and MVPFs across SES and test scores using RD and boundary discontinuity designs. We find unambiguous

welfare gains from targeting low-SES high-achievers, with substantial treatment effect heterogeneity. Targeting higher-scoring students reduces progressivity, enrollment effects, and the MVPF—especially when students respond to policy incentives. In contrast, targeting poorer high-achievers enhances both equity and efficiency, aligning redistributive and efficiency goals.

Web investigador: https://sites.google.com/site/julianalondonovelez/

Zoom link: https://salavirtual-udelar.zoom.us/j/84144863704?pwd=L7A2qIhOUWFdWjPMu23XqbrX8SNRtc.1