The Causal Effect of Scholarships Targeted at Low-Income Students on Performance: Evidence from Italy

This paper exploits discontinuities in the assignment of scholarships targeted at low-income students in an Italian University in order to evaluate the effects of monetary incentives on students’ academic achievement. Results reveal positive and sizeable causal effects both in terms of credits and grades. Gender differentials also emerge: male students drive the results on credits outcome while females students drive the effect on grades. These results suggest that the scholarship design contributes to reducing the probability of delayed graduation (“Fuori Corso” problem).