Abstract
We study whether large government capital grants to colleges serving school leavers in England improve student outcomes, using the timing of grant allocation as a source of exogenous variation. Grants improve physical facilities and shift student composition toward higher-attaining and less disadvantaged students. Even after accounting for these compositional changes, grants improve educational and labour market outcomes: completion of upper-secondary qualifications (required for university entry) rises by 13 percent relative to the control group, the probability of earning a university degree by 14.5 percent, and the probability of sustained employment two years after leaving college by 4 percent. All effects emerge around three years after grant approval, once construction is complete. J.E.L. codes: I21; I22; I28