We exploit the natural experiment provided by the Vietnam lottery draft to evaluate the intergenerational effects of fathers’ draft eligibility on children’s propensity to engage in risky behaviors during adolescence using the National Longitudinal Survey of Youth 1997. Draft eligibility increases measures of substance use, increases intensity of use, decreases age of initiation—particularly for marijuana—and increases measures of delinquency. We also show that draft eligibility led to changes in parenting that are conducive to these risky behaviors among children: it affects paternal parenting styles and attitudes toward the respondent, environmental aspects, and even maternal factors. Results are robust to alternative specifications and falsification diagnostics.

Abstract This paper provides novel evidence that increased student loan debts, caused by rising tuitions, increase borrowers’ demand for additional consumer debt, while simultaneously restricting their ability to access it. The net effect of student loan debt on consumer borrowing varies by market, depending on whether the supply or demand channel dominates. In loosely underwritten credit markets, increased student loan debt causes borrowing to increase, while in tightly underwritten markets, increased student loan debt reduces credit use. These findings match predictions of a standard life cycle model of household consumption and borrowing, augmented by a realistic student loan repayment contract. (JEL G51, D15, I22, D14)