Journal of Labor Economics Vol. 31 No. 4 2013
Borrowing Constraints, College Enrollment, and Delayed Entry
Abstract
In this article, I propose and estimate a dynamic model of education, borrowing, and work decisions of high school graduates. I examine the effect of relaxing borrowing constraints on educational attainment by simulating increases in the amount students are permitted to borrow from government-sponsored loan programs. My results indicate that borrowing constraints have a small impact on attainment: the removal of education-related borrowing constraints raises bachelor’s degree completion by 2.4 percentage points. Tuition subsidies are necessary to obtain larger increases: I find that higher subsidies for average-ability students are the most cost effective targeted tuition subsidies.
- DOI
- 10.1086/669964
- Volume
- 31
- Issue
- 4
- Pages
- 669-725
- Language
- en
- Sources
- openalex crossref