Federal Financial Aid and Family Formation: Examining the Social Security Student Benefit Program
A broad empirical literature asks if social policies designed to provide benefits to low-income families also affect family formation patterns. While most of the evidence suggests that family formation effects are small at best, and often nonexistent, recent research argues that policies that alter budget constraints considerably should have greater family formation impacts. We tested this hypothesis by investigating the Social Security Student Benefit Program (SSSBP), a program designed to provide large higher education subsidies for the children of disabled, retired, or deceased parents. Conditions for receipt of SSSBP created strong incentives to delay marriage. Utilizing data from the National Longitudinal Survey of Youth, 1979, and a difference-in-differences model, we found that women potentially qualifying for the SSSBP were much less likely to marry before age 22 and were older when they had children, while the program did not influence the probability of women ever marrying or having children. Impacts on men, however, were negligible.
KeywordsSocial Security Student Benefits Program Tuition assistance Family formation
We are grateful for comments from Sarah Hamersma, Bob Bifulco, and Len Burman on an earlier version of this paper. The authors thank Susan Dynarski for sharing her Stata code from her 2003 article “Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion” published in the American Economic Review.
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