The Effects of Federal Work-Study on First-Year College Outcomes: A Regression Discontinuity Approach

While the federal work-study program is one of the longest-standing forms of federal financial aid for higher education, it remains understudied due to limited data availability and policy details, particularly because the program is administered at the institutional level. Students also self-select into the program, and a major challenge in prior research has been identifying an exogenous source of variation in participation. This study addresses these gaps by leveraging administrative records for 26,871 students, including demographics, financial aid, academic records, and on-campus employment and payroll data, along with information on financial aid packaging. Using the expected family contribution cutoff for federal work-study eligibility, I employ a fuzzy regression discontinuity design to estimate program effects on first-year GPA, second-year retention, and average weekly work hours and earnings from on-campus employment. Findings indicate that students offered federal work-study differ demographically from those who decline their offers. Differences in on-campus employment patterns (e.g., job type, hours, and earnings) are substantial between students with and without federal work-study offers. Although program participants exhibit the most intensive work patterns (more jobs and longer hours) among on-campus employees, participation shows no negative effects on academic outcomes. No heterogeneous program effects are observed across student subgroups.