Financing higher education in Brazil: the impact of FIES program on wages

Abstract

This paper analyzes the impact of the Federal Student Aid Program (FIES) on workers’ wages using data from the Brazilian official registry of workers (RAIS) and the National Fund for Education Development (FNDE). By means of Propensity Score Matching (PSM), we compare two groups: people who have benefited from the Fies and people who have not but are demographically very similar. The likelihood of using Fies depends primarily on the age, color, region and sector where the individual works. Matching the student/worker data shows that the wage of those who graduated with Fies is approximately 26% higher than that of those who did not complete higher education. We did not find significant differences between people with higher education who had benefited from Fies or had not. Finally, simulations indicate that the program’s implicit subsidy, within reasonable parameters, is financially viable for the worker.