The Heterogeneous Effect of Grants on Students' Performance: Evidence from five Italian Universities

This paper estimates the effect of receiving a need-based grant on the performance of university students in Italy. We perform both cross-sectional (between-universities) and within-universities propensity score matching analyses in order to evaluate the effect of grants on several students’ performance indicators as first year credits, dropout, and study efficiency. The findings suggest that financial aid positively affects students’ performances and completion in a substantial and statistically robust way. The positive impact is heterogeneous across universities, while few differences are detected for subgroups of students within them. Reinforcing the financial aid policy can simultaneously help disadvantaged students and foster the overall academic performance of Italian universities