Students who attend college in Georgia rather than out-of-state because of the HOPE scholarship award appear to be more likely to leave the state after college, according to Professor David L. Sjoquist, the Dan E. Sweat Distinguished Chair in Educational and Community Policy, and alumnus John V. Winters, assistant professor of economics at the University of Cincinnati.
In their paper, “The Effects of HOPE on Post College Retention in the Georgia Workforce,” recently published in Regional Science and Urban Economics, Sjoquist and Winters consider the effect of HOPE on post-college retention in two ways. First, they looked at students who received HOPE scholarships using administrative data from the University System of Georgia (USG) and the Georgia Department of Labor. Using pre- and post-HOPE cohorts of freshmen, they measured the scholarship’s effect on after-college retention (i.e., employment in the state several years after high school) in Georgia’s workforce.
They find that the post-college retention rate fell as a result of HOPE, particularly for the best HOPE-eligible students. They attribute this to the change in the composition of in-state college students due to HOPE, suggesting that while HOPE kept many students in-state for college, many then left after college since they likely were predisposed to leave the state. The in-state retention rate prior to HOPE was 80.7 percent three years after college graduation, while for HOPE scholars it was 77.5 percent.
Second, they examined those who graduated from high school when HOPE was available and relied on a variety of census data to measure the effect of HOPE on living in Georgia after college. In this approach, they looked at after-college residential retention in Georgia based on the number of college-educated persons born in Georgia and living in Georgia after they graduated, regardless of whether they attended college in the state. Using this approach, which controls for any change in the composition of in-state students, Sjoquist and Winters find no change in the retention rate due to HOPE.
When the HOPE Scholarship program was launched in 1993, student aid in Georgia was the third lowest in the country. Between 1993 and 2010, the number of HOPE recipients increased from 42,796 to 256,484, while the value of the awards increased from $21.4 million to $748.2 million. By 2010-11, total student aid in Georgia had grown 31 times larger compared to five times in the U.S.
One of the primary objectives for these programs is increasing the quality of the workforce, in part by retaining the best and the brightest after they graduate from college. Prior research suggests that state merit scholarship programs increase college enrollment in states that adopt them. However, post-college migration may limit the effect these programs have on the stock of college-educated labor in those states.
The authors note that these results have policy implications for Georgia and other states that have adopted or are considering adopting merit-based financial aid programs since the public benefits to states investing in students this way are largely contingent on keeping them in the state’s workforce after college. HOPE scholars who leave the state after attending college reduce the state’s return on its expenditure.