Judith Scott-Clayton is an assistant professor at Teachers College, Columbia University.
Readers following recent proposals to stimulate employment may be surprised to learn that one of the largest and longest-running federal programs providing direct employer subsidies to hire disadvantaged workers is run by the Department of Education.
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The Federal Work-Study Program, created in 1964, provides more than $1 billion in wage subsidies to institutions and reaches more than 750,000 college students each year. For students who are financially eligible, the program covers up to 75 percent of wages for 10 to 15 weekly hours of on-campus employment or, in some cases, for community service work off campus. The college covers the rest.
The federal government spends only about half as much on the Work Opportunity Tax Credit, which subsidizes 25 to 40 percent of wages when employers hire workers in one of nine target groups.
The longevity of the work-study program program reflects its popularity, and, to some extent, romanticized public conceptions of the student “working his way through college” (see, for example, this 1907 article from The New York Times Magazine). Surveys suggest that students like the program. And it’s obvious why work-study is beloved by institutions: it provides a highly discounted labor pool.
But popularity aside, the equity and efficiency of the program are questionable at best.
Unlike Pell Grants or student loans (and also unlike other wage-subsidy programs like the Work Opportunity Tax Credit), work-study dollars aren’t really distributed on the basis of need. The eligibility criteria are loose enough that far more students qualify for work-study than can receive it, and colleges can choose from among eligible students however they want.
Fewer than half of undergraduate work-study recipients are needy enough to qualify for a Pell Grant, and 20 percent come from families earning more than $100,000 a year (see chart).
National Postsecondary Student Aid Survey, 2008 (figures represent dependent undergraduates only).
Moreover, the way work-study funds are allocated to individual institutions has virtually no connection to the neediness of its student body. The precise formula is incredibly arcane, but the first five words capture the essence: “Allocation based on previous allocation.” The highest per-student allocations go to already advantaged institutions that had access to savvy grant-proposal writers when initial allocations were determined by review boards in the late 1960s (see this report for the program history).
The inequity is extreme: Columbia University receives more than five times as much in work-study allocations as Florida State University, although Florida State has more than five times as many undergraduates, a much higher proportion of whom qualify for Pell Grants.
The chart below shows the ratio of work-study allocations to aggregate Pell Grants awarded (a summary measure of the neediness of the student population) for selected institutions. The ratios for elite schools like Columbia and Harvard have been even higher in previous years.
Author’s calculations using Department of Education data for 2008-9.
More fundamentally, it’s not clear that the program works very well either as a jobs program or a financial aid program. While work-study jobs may help improve students’ work ethic, they are typically low-skill clerical or service positions unrelated to students’ studies or future career plans. In other words, they are the type of jobs most students would be able to find even without a work-study subsidy.
Finally, in comparison with the large body of rigorous research on other types of financial aid, the evidence regarding the academic benefits of work-study assistance is thin. While some correlational studies have found a positive relationship between on-campus employment and academic outcomes, one particularly rigorous quasi-experimental study found large negative effects of student employment on grade point averages.
My own research-in-progress indicates strong negative effects for women, but some positive effects for men – perhaps explained by gender differences in job types or in what students would be doing if they weren’t working.
Now is not the time to reduce federal investments in financial aid and jobs programs. The work-study program could be reformed to better target truly needy students, to provide more substantive job options or even to give students the option of taking the value of their wage subsidy as a grant instead.
But in its current form, federal work-study may better serve the interests of privileged institutions than those of needy students.
Article source: http://feeds.nytimes.com/click.phdo?i=20f835be1cdefdda71b444dd7274a65e
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