Guidance Intervention for College Going in Canadian High Schools
Introduction
Renée (2024) studies a randomized control trial in New Brunswick, Canada which aimed to increase college attendance. The Future to Discover experiment implemented three interventions: (1) career guidance, (2) financial aid, and (3) a mixed intervention where students received both of these services. The RCT recruited 9th graders at participating schools in the spring of 2004 and 2005. Students from low-income families were randomly assigned to one of the three interventions or the control group. High-income students were only randomly assigned to either the guidance intervention or the control group.
The career guidance intervention involved 20 workshops spread out across 10th through 12th grade as well as information dispersed through a website and a magazine which stressed the importance of career planning and exploration. The financial aid intervention provided a grant of $2,400 CAD each term (up to four terms) that students were enrolled full-time in college. This provided a decrease of 25-35 percent in the total student cost of living for the period that the grant covered.
The paper uses records from universities and colleges to track whether students enrolled and graduated from an institution within ten years of high-school graduation. The universe of Canadian tax returns provides information on students’ incomes from ages 18 to 29.
For low-income students, the guidance intervention increased college enrollment by 7.0 percentage points, mostly through four-year college attendance. The guidance intervention increased income 10 percent over the control group mean between ages 27 and 29.
Renée (2024) uses these estimates to calculate the MVPF for the guidance intervention on low-income students.
Pays for Itself
Net Cost
The guidance intervention required operating costs to create the workshops, website, and magazine. Ford et al. (2012) estimate that this cost CA$4,537 per student. Additionally, as students were induced to attend college, this led to an average increase of CA$356 in student grants paid by the government.
Increases in labor market earnings led to increases in income taxes collected by the government. The paper forecasts lifetime earning increases using observed income at age 29 and an estimation of the lifetime income growth rate using data in the 2021 Canadian Census. The paper estimates before-tax and after-tax lifetime earnings to estimate that treated participants remit an additional CA$16,430 in income taxes.
The net government cost is CA$4,537 + CA$356 – CA$16,430 = -CA$11,538 per participant treated with the guidance intervention.
Willingness to Pay
The paper estimates the willingness to pay for the guidance intervention as the increase in lifetime earnings due to the intervention minus the additional costs they paid for college. On average, recipients of this intervention paid an additional CA$2,452 for college tuition and fees and received an additional grant of CA$356.
The paper estimates that lifetime after-tax earnings increase by CA$40,031. Thus, the total willingness to pay is CA$40,031 – CA$2,452 + CA$356 = CA$37,935.
MVPF Summary
Given a negative net cost to the government and a positive willingness to pay, the intervention has an infinite MVPF.
While the paper does not explicitly discuss MVPFs for the financial aid and mixed interventions, they can be computed from the cost-benefit analysis. The implied MVPF is 0.72 for the financial aid intervention and infinite for the mixed intervention.
References
Ford, Reuben, Marc Frenette, Claudia Nicholson, Isaac Kwakye, Taylor S. Hui, Judith Hutchison, Sabrina Dobrer, Heather S. Fowler, and Sophie Hébert (2012). “Future to Discover: Post-secondary Impacts Report.” Social Research and Demonstration Corporation. https://www.srdc.org/project/future-to-discover-ftd-post-secondary-impacts-report/#:~:text=This%20report%20shows%20that%20offering,enrolment%20in%20post%2Dsecondary%20studies
Renée, Laëtitia (2024). “The Long-Term Effects of Career Guidance in High School
and Student Financial Aid: Evidence from a Randomized Experiment.” Forthcoming in American Economic Journal: Applied Economics. https://www.aeaweb.org/articles?id=10.1257/app.20230342&from=f
Policy Features
- Category
- Education
- Sub-Category
- College Child
- Beneficiary Type(s)
- College enrollees, Secondary school enrollees, Students
- Average Age
- 15
- Country of Implementation
- Canada
- Year of Implementation
- 2004
- Empirical Method
- RCT
- Research Type
- Primary
- Peer Reviewed
- Yes
- MVPF Publication Link
- www.aeaweb.org/articles?id=10.1257/app.20230342&from=f