This paper examines the effects of Georgia's merit-based HOPE Scholarship on college enrollment. Introduced in 1993, the HOPE Scholarship covers tuition, fees, and book expenses for students attending Georgia public colleges, and provides a subsidy of comparable value to students attending...

A common justification for HOPE-style merit-aid programs is to promote and reward academic achievement, thereby inducing greater investments in human capital. However, grade-based eligibility and retention rules encourage other behavioral responses. Using the longitudinal records of all...