Do research fellowships impact future earnings? Evidence from the São Paulo Research Foundation

Abstract Competitive fellowships are widely used for allocating limited public research resources, but their private returns to recipients remain largely unexplored. This paper examines fellowships awarded by the São Paulo Research Foundation (FAPESP), Brazil’s largest state-level research funding agency, by estimating their impact on former recipients’ hourly wages across four levels: undergraduate, Master’s, Ph.D. and postdoctoral. The analysis focuses on the intensive margin—individuals employed both before and after the fellowship—and applies a difference-in-differences framework with individual fixed effects. It draws on employment data for approved and rejected applicants, covering up to 3 years before and 10 years after the fellowship period. Results indicate that FAPESP fellowships have a statistically significant positive effect on the future earnings of fellows, averaging 4.5%. The estimated effect persists over time and increases after the initial years, starting at 2.7% in the first year and rising to 4.8% or more in most years from the fifth onward. The positive association appears across all levels, though results are less robust under alternative specifications for undergraduate and Master’s recipients. The impact estimates are larger at the most advanced stages: 7.6% for Ph.D. and 4% for postdoctoral fellowships. These findings underscore the importance of research funding in training highly qualified personnel for both academic and non-academic sectors.