Improving Work and Equity for Lower-Income Students: Examining the Effects and Underlying Mechanisms of Federal Work-Study

Abstract

The federal work-study program is one of the earliest forms of federal financial aid for higher education in the United States and has come under close scrutiny for its debatable impact on low-income students’ college success and persistence. However, federal work-study surprisingly remains one of the least-studied financial aid programs. This has been largely due to the unavailability of detailed institutional data and information about how institutions allocate work-study funds to students and the difficulty of identifying plausibly exogenous factors that determine students’ participation in the program.

The goal of this study was thus to overcome these limitations and contribute to accumulating robust evidence on the impact of federal work-study on lower-income students. I seek to inform stakeholders about whether the program is a valuable financial aid choice to be prolonged and in what ways, it could remain as one. With unprecedented access to six years of administrative student records, information about financial aid packaging processes, and a student survey from a large, highly selective public four-year institution in the Midwest, I took a deep dive to answer fundamental questions about the effects and underlying mechanisms of federal work-study among lower-income first-year students.

I began by examining the demographic and behavioral landscapes of work-study students. I find that compared to work-study-offer decliners, work-study students demonstrate greater financial needs and have higher percentages of underrepresented minorities and first-generation students. On campus, work-study students also exhibit more intense part-time working behavior than non-work-study student employees, working significantly more hours with a greater share of students working more than one job. Intriguingly, work-study-offered students mostly engage in research-type work while those without work-study offers largely work labor/service jobs.

Exploiting the case institution’s rigid rule for work-study aid eligibility, the expected family contribution cutoff, I then used a fuzzy regression discontinuity design to estimate the causal effects of work-study employment on students’ first-year outcomes. I discover that work-study employment has null effects on students’ first-year GPA and persistence to sophomore year. Meanwhile, work-study employment significantly increases students’ weekly hours worked on campus. Importantly, work-study has heterogeneous effects, inducing male students and underrepresented minority students to work more hours on campus than their counterparts.

To better understand the low take-up of work-study, I further investigated the mechanisms of students’ work-study decisions through a survey. The findings reveal diverse informational and structural barriers that hinder students from making informed decisions about their work-study offers. Students experience cognitive overload, wrestling with gathering and digesting a great amount of information about federal work-study. Hiring processes are also an obstacle to matching students with available positions. First-year students highlight their need for time to transition to college prior to accepting any part-time work. Overall, lower-income first-year students advocate for timely delivery of accurate information about the federal work-study program, a well-structured, guided process of work-study employment, and access to meaningful work opportunities.