Enlist or enroll: Credit constraints, college aid, and the military enlistment margin. (April 2016)

• Record Type: Journal Article
• Authors: Barr, Andrew
• Is Part Of: Economics of education review. Volume 51(2016:Apr.)
• Page Start: 61
• Page End: 78
• Publication Date: 2016-04
• Subjects: Credit constraints -- Financial aid -- Military enlistment; I22 -- I23 -- I24; Education -- Economic aspects -- Periodicals; 370
• DOI: 10.1016/j.econedurev.2015.06.003
• Languages: English
• ISSNs: 0272-7757

Abstract

Highlights: Individuals may enlist to overcome financial constraints that delay college enrollment. Some financial aid programs allow individuals to delay receipt until after military enlistment. Availability of aid reduces the likelihood of military enlistment for those likely to be eligible. The reductions in enlistment are largest in low-income areas, where constraints are most likely. Abstract: Money for education is a primary motivation for military enlistment. One explanation is that individuals use these benefits to overcome borrowing constraints. I explore this by examining the enlistment response of individuals to additional financial aid that can be used immediately upon high-school graduation or delayed until after military enlistment. I find that the introduction of a merit-aid program decreases the probability that a male enlists in the military by 0.6 percentage points (a 6% reduction), and that these effects are concentrated among applicants who are more likely to qualify for merit scholarships. The reductions are largest in low-income areas, supporting the argument that the effects on enlistment are a result of easing financial constraints.