Some futures are brighter than others: the net benefits received by Florida bright futures scholarship recipients

Using a choice-based sample of households in Florida, the authors provide new empirical evidence on the budgetary incidence of lottery-funded merit scholarships. Specifically, they estimate the benefits received from the Florida Bright Futures (FBF) scholarship and the lottery taxes paid for three typical households in Florida. They find that high socioeconomic (SES) households receive a net program benefit of almost $2,200, whereas low SES households incur a net programloss of almost $700. This result obtains because lower SES households tend to pay more in lottery taxes but are less likely to receive scholarships. Also, the lower SES households with members who do receive the FBF scholarship are more likely to receive the 75% partial scholarship (vs. the 100% full scholarship) than the higher SES households. The results indicate that lottery-funded merit scholarships redistribute income from lower income, non-White, and less educated households to higher income, White, well-educated households.