Financial Aid for Scientists and Engineers

Open Access
Kim, Moon Jung
Graduate Program:
Doctor of Philosophy
Document Type:
Date of Defense:
April 18, 2016
Committee Members:
  • James Tybout , Dissertation Advisor
  • James R. Tybout, Committee Chair
  • Russell Wade Cooper, Committee Member
  • Stephen Ross Yeaple, Committee Member
  • Liang Zhang, Outside Member
  • graduate education
  • science and engineering
  • financial aid
  • dynamic discrete choice model
In the United States, more than 4 billion dollars of grant-based financial aid (GFA) is provided annually in the form of assistantships, fellowships, or tuition waivers to students enrolled in sciences and engineering (S&E) doctoral programs. My dissertation investigates this substantive financial support. I ask two questions in particular. The first question is whether the current GFA policy is cost-efficient. GFA may increase the number of students who are enrolled in S&E doctoral programs, but in doing so, it may attract those who are likely to drop out during their programs or who may take additional years to complete their programs. I ask whether it is possible to spend less money while awarding the same number of S&E doctorates. To this end, I construct a dynamic discrete choice model of S&E baccalaureates in which the baccalaureates decide whether to work and/or whether to attain graduate education each year after college graduation. My estimation is based on Baccalaureate and Beyond Longitudinal Study for the years 1993-2003. I find that those who are likely to complete S&E doctoral programs under the current GFA policy are less responsive to policy changes compared to those who are likely to drop out of the programs. By exploiting the differential responsiveness of individuals I am able to come up with an alternative GFA policy that costs 25 percent less yet produces the same number of S&E doctorates. The second question I ask is how a policy that relaxes individual-side credit-constraints influences the composition of firms and individuals engaging in research and development (R&D). To this end, I construct a static general equilibrium model in which individuals of different endowment levels make decisions regarding education while facing credit-constraints, while firms of heterogeneous productivity decide over production and R&D investment. I show that tuition subsidies increase the relative supply of research services compared to production services, while lowering the cost of R&D activity and increasing the cost of production. As a result, the less-productive firms engage in R&D, and the least productive firms exit the market. On the individual side, depending on the initial conditions of the economy, the subsidies may ultimately attract only the most talented individuals, without encouraging rich and less-talented individuals to enroll in programs. Chapter 1 offers an introduction to the study, Chapters 2 and 3 are devoted to the first question, and Chapter 4 addresses the second question.