Essays on the Economics of Education and the Design of Higher Education Policies

Abstract

This dissertation investigates the impact of information and policy on the efficiency of higher education financing, particularly for low-income students in Latin America. Through three empirical studies, it addresses the barriers posed by information asymmetries and institutional discretion in student loan and college admission processes and their implications for educational and economic outcomes. The first chapter examines the role of information in the demand for student loans among low-income students in Colombia. It finds that a significant proportion of these students are misinformed about their eligibility and the costs of student loans. A nationwide experiment with an interactive chatbot delivering personalized information shows that correcting these misperceptions significantly increases loan application and take-up rates, particularly among the most misinformed students. These results highlight the potential of targeted information interventions in improving the efficiency of financial aid distribution. The second chapter, coauthored with Eduard Boehm, explores the effect of university discretion over admission requirements on academic achievement and access to higher education in Chile. By analyzing a policy reform that allowed universities to adjust admission criteria, the study reveals a trade-off between increased access for low socioeconomic status (SES) students and their academic persistence. The findings suggest that while relaxed admission standards can enhance diversity, they may also lead to lower academic success rates among newly admitted students, indicating the need for carefully considered admission policies.

The third chapter investigates the influence of student loans on individual college and major choices in Chile. Using a discrete choice model and a regression discontinuity design, the study shows that student loans alleviate credit constraints and enable students to make choices that, on average, raise expected earnings. However, it also uncovers a propensity among some low-income students to select low-return degrees, which perpetuates earnings disparities between high- and low-SES students. This underscores the importance of considering demand- and supply-side responses to financial aid policies.

Together, these studies provide a multifaceted analysis of how information and policy interventions can address financial barriers to higher education, emphasizing the need for informed decision-making and balanced policy design to enhance educational equity and efficiency.