Graduating from college remains one of the best routes out of poverty. Recent research shows that returns to higher education are now larger than the returns to any other education sector, and they are particularly large for low-income countries. In low- and middle-income countries, the private (wage) returns to accessing higher education are 26.8 percent and 20.2 percent, respectively, relative to obtaining a high school degree. Women tend to have higher rates of return than men, and there is even some evidence (from the United States) that children from poor families benefit the most from higher education.
So the question for policy makers is not whether, but how to support children from disadvantaged families get into higher education and how to help them graduate. The good news is that there is now a sizeable and high-quality literature that analyzes interventions and policies which aim to support disadvantaged students in higher education. In our new working paper, we rigorously selected, gathered and compared over 200 causal estimates, from 75 studies, of the effects of such interventions around the world.
What are the four main things that we learned?
1. There are several mechanisms driving the under-representation of disadvantaged students in higher education
The first thing we learned is that there are different mechanisms driving exclusion and each of these can be targeted by different types of policies. One is that disadvantaged students have unmet financial needs to pay for college tuition, need to defer wages to pay for their living expenses or have credit constraints in accessing loans. A second mechanism is the lack of academic readiness, since disadvantaged children (on average) have a less stimulating home environment, have access to poorer quality schools and do not have much academic support outside school. And a lower level of academic readiness prevents students to be admitted to or succeed in higher education. Thirdly, disadvantaged students lack the right information about the cost of college education, about its benefits in the labor-market, or about existing financial aid schemes. Finally, students have various forms of cognitive bias that keep them away from college, such as present bias, cognitive overload, routine or status quo bias. These biases may be more common among disadvantaged students who may not have a parent who keeps reminding them to read through college brochures, helps them to make strategic choices to apply to college or takes them on tours of campuses. Identifying the mechanisms that cause the under-representation of disadvantaged students is important, because different types of interventions may, (and should) target different kinds of mechanisms.
2. Policy makers should consider implementing more outreach policies
A key result of our review is that, well-designed, outreach interventions have large effects on enrollment rates of disadvantaged students. Outreach activities typically provide information and/or counselling to children in high school. These policies can target the lack of academic preparation, can raise aspirations, or just smoothen the transition from high school to university. We find that outreach policies are broadly effective in increasing access for disadvantaged students when they include active counseling or simplify the university application process, but not when they only provide general information on higher education. That being said, one paper from China did find that information alone may be efficient, so perhaps there is still more to understand about this, depending on the national context.
3. Policy makers should use financial aid more efficiently
There are now a wide variety of financial instruments that are used to address unmet financial needs in higher education, including universal grants, targeted needs-based grants, merit-based grants, performance-based grants, student loans, and tax exemption policies. We find that these policies are not equally successful at helping students. The good news is that we found that sizeable needs-based aid shows very large and consistent effects on helping students to access and graduate from college. In contrast, we do not find consistent positive effects for small needs-based aid, merit-based aid, and tax exemption policies.
Another interesting finding is that a number of recent studies have shown that an early commitment for grant aid (which is already known to students in high school) seems to be very effective at raising enrolment. Thus, the timing of the grant notification should be considered when designing financial aid schemes. Finally, we note that we still know very little about the effectiveness of loans, and thus this should be a priority for future research as loans are popular in policy making circles.
4. Researchers should produce more evidence from developing countries
We were very happy to see that there are now many high-quality studies available and that the available (quasi-)experimental evidence on this topic is growing quickly. But we were somewhat taken aback that we identified only five studies from low- and middle-income countries. This may have to do with our strict inclusion criteria (or simply our human tendency to overlook important research; in that case, please share your papers). But we think that there may be a huge missed opportunity for the research community. Policy makers around the world are really keen to learn more about equity in higher education, particularly as demand is rising around the world with more and more children in school now than ever before.