Description:

Speaker: Elizabeth Jaramillo

Title: Family Dynamics and Educational Outcomes: the Impact of Financial Aid on Siblings

Abstract: This paper studies sibling spillovers from a large-scale higher education financial aid program. In 2014, the Colombian government launched Ser Pilo Paga (“Hard Work Pays Off”), a merit- and need-based scholarship targeting high-achieving students from low-income households. Eligibility was determined by household poverty and performance on the national standardized high school exit exam. Leveraging quasi-random variation around the eligibility cutoff in a difference-in-differences framework, we estimate the impact of program eligibility on younger siblings' outcomes. We find that younger siblings of eligible students experience sizable gains in standardized test scores (0.13 SD or 56%) and a 12.4% increase in college enrollment, particularly in high-quality institutions. We also observe a 9.5% increase in their likelihood of formal employment. In addition, we find evidence that younger siblings of students just below the eligibility threshold also improved their academic performance, suggesting that access to opportunity can increase motivation and effort. Because the program primarily targeted low-income households, who are disproportionately represented in the criminal justice system, we also examine effects on crime. Linking administrative data with web-scraped criminal records, we find that younger siblings of eligible students are significantly less likely to be convicted of a crime, with effects concentrated among the poorest households. Our findings highlight the presence of sibling spillovers and suggest that policies targeting one child in a family can generate broader benefits, across education, labor market outcomes, and even criminal justice involvement, for other household members.