Credit constraints in education

Annual Review of Economics

Volumn 4, Issue , 2012, Pages 225-256

  Lochner, Lance ^a   Monge Naranjo, Alexander ^b  

^a UNIVERSITY OF WESTERN ONTARIO   (Canada)

^b PENNSYLVANIA STATE UNIVERSITY   (United States)

Author keywords

early investments; government loans; human capital; incentive problems; social mobility

Indexed keywords

EID: 84873158345     PISSN: 19411383     EISSN: 19411391     Source Type: Journal    
DOI: 10.1146/annurev-economics-080511-110920     Document Type: Article

References (99)

1. Acemoglu D, Shimer R. 1999. Efficient unemployment insurance. J. Polit. Econ. 107: 893-928
2. Aiyagari SR. 1994. Uninsured idiosyncratic risk and aggregate saving. Q. J. Econ. 109: 659-84
3. Aiyagari SR, Greenwood J, Seshadri A. 2002. Efficient investment in children. J. Econ. Theory 102: 290-321
4. Almlund M, Duckworth AL, Heckman J, Kautz T. 2011. Personality psychology and economics. In Handbook of the Economics of Education, Vol. 4, ed. E. Hanushek, S Machin, L Woesmann, pp. 1-181. Amsterdam: Elsevier
5. Akee RK, Copeland WE, Keeler G, Angold A, Costello EJ. 2010. Parents' incomes and children's outcomes: a quasi-experiment using transfer payments from casino profits. Am. Econ. J. Appl. Econ. 2: 86-115
6. Alessie R, Devereux MP, Weber G. 1997. Intertemporal consumption, durables and liquidity constraints: a cohort analysis. Eur. Econ. Rev. 41: 37-59
7. Andolfatto D, GervaisM. 2006. Human capital investment and debt constraints. Rev. Econ. Dyn. 9: 52-67
8. Avery C, Turner S. 2010. Playing the college application game: critical moves and the link to socioeconomic circumstances. Work. Pap., Univ. Virginia
9. Becker GS. 1967. Human Capital and the Personal Distribution of Income: An Analytical Approach. Woytinsky Lect. 1. Ann Arbor: Univ. Michigan, Inst. Public Admin.
10. Becker GS. 1975. Human Capital. New York: Columbia Univ. Press. 2nd ed.
11. Becker GS, Tomes N. 1979. An equilibrium theory of the distribution of income and intergenerational mobility. J. Polit. Econ. 87: 1153-89
12. Becker GS, Tomes N. 1986. Human capital and the rise and fall of families. J. Labor Econ. 4: S1-39
13. Belley P, Frenette M, Lochner L. 2011. Post-secondary attendance by parental income in the U.S. and Canada: what role for financial aid policy? NBERWork. Pap. 17218
14. Belley P, Lochner L. 2007. The changing role of family income and ability in determining educational achievement. J. Hum. Cap. 1: 37-89
15. Benabou R. 2003. Human capital, technical change, and the welfare state. J. Eur. Econ. Assoc. 1: 522-32
16. Ben-Porath Y. 1967. The production of human capital and the life cycle of earnings. J. Polit. Econ. 75: 352-65
17. Bettinger EP, Long BT, Oreopoulos P, Sanbonmatsu L. 2009. The role of simplification and information in college decisions: results from the H&R Block FAFSA experiment. NBERWork. Pap. 15361
18. Bils M, Klenow PJ. 2000. Does schooling cause growth? Am. Econ. Rev. 90: 1160-83
19. Blau D, Currie J. 2006. Pre-school, day care, and after-school care: Who's minding the kids? In Handbook of the Economics of Education, Vol. 2, ed. E Hanushek, F Welch, pp. 1163-278. Amsterdam: Elsevier
20. Boldrin M, Montes A. 2004. The intergenerational state: education and pensions. Staff Rep. 336, Fed. Reserve Bank Minneap.
21. Braguinsky S, Ohyama A. 2010. Borrowing for college and post-graduation earnings. Work. Pap., Carnegie Mellon Univ.
22. Brown M, Scholz JK, Seshadri A. 2011. A new test of borrowing constraints for education. Work. Pap., Univ. Wisconsin
23. Buera FJ, Kaboski JP, Shin Y. 2011. Finance and development: a tale of two sectors. Am. Econ. Rev. 101: 1964-2002
24. Cameron S, Heckman JJ. 1998. Life cycle schooling and dynamic selection bias: models and evidence for five cohorts of American males. J. Polit. Econ. 106: 262-333
25. Cameron S, Heckman JJ. 1999. Can tuition policy combat rising wage inequality? In Financing College Tuition: Government Policies and Educational Priorities, ed. MH Kosters, pp. 76-124. Washington: Am. Enterp. Inst.
26. Cameron S, Taber C. 2004. Estimation of educational borrowing constraints using returns to schooling. J. Polit. Econ. 112: 132-82
27. Card DE. 1995. Earnings, schooling, and ability revisited. In Research in Labor Economics, Vol. 14, ed. SW Polachek, pp. 23-48. Greenwich, CT: JAI
28. Card DE. 1999. The causal effect of education on earnings. In Handbook of Labor Economics, Vol. 3, ed. OC Ashenfelter, D Card, pp. 1801-63. Amsterdam: Elsevier
29. Carneiro P, Heckman JJ. 2002. The evidence on credit constraints in post-secondary schooling. Econ. J. 112: 705-34
30. Carneiro P, Heckman JJ, Vytlacil EJ. 2011. Estimating marginal returns to education. Am. Econ. Rev. 101: 2754-81
31. Caucutt E, Kumar K. 2003. Higher education subsidies and heterogeneity: a dynamic analysis. J. Econ. Dyn. Control 27: 1459-502
32. Caucutt E, Lochner L. 2006. Borrowing constraints on families with young children. In Innovation in Education: Proc. Fed. Reserve Bank Cleveland, pp. 39-48. Cleveland, OH: Fed. Reserve Bank Cleveland
33. Caucutt E, Lochner L. 2011. Early and late human capital investments, borrowing constraints, and the family. Work. Pap., Univ. Western Ontario
34. Chade H, Lewis G, Smith L. 2011. Student portfolios and the college admissions problem. SSRN Work. Pap. 135834
35. Chatterjee S, Ionescu F. 2010. Insuring student loans against the risk of college failure.Work. Pap. 10-31, Fed. Reserve Bank Phila.
36. College Board. 2004. Trends in Student Aid. New York: Coll. Board College Board. 2006. Trends in Student Aid. New York: Coll. Board
37. Cordoba JC, Ripoll M. 2011. What explains schooling differences across countries? Work. Pap., Univ. Pittsburgh
38. Cunha F. 2007. A time to plant and a time to reap. Work. Pap., Univ. Chicago
39. Cunha F, Heckman J. 2007. The technology of skill formation. Am. Econ. Rev. 97: 31-47
40. Cunha F, Heckman JJ, Lochner L, Masterov DV. 2006. Interpreting the evidence on life cycle skill formation. In Handbook of the Economics of Education, Vol. 1, ed. E Hanushek, F Welch, pp. 697-812. Amsterdam: Elsevier
41. Cunha F, Heckman JJ, Navarro S. 2005. Separating uncertainty from heterogeneity in life cycle earnings. Oxf. Econ. Pap. 57(2): 191-261
42. Cunha F, Heckman JJ, Schennach SM. 2010. Estimating the technology of cognitive and noncognitive skill formation. Econometrica 78: 883-931
43. Dahl G, Lochner L. 2012. The impact of family income on child achievement: evidence from the Earned Income Tax Credit. Am. Econ. Rev. In Press
44. Del Boca D, Flinn C, Wiswall M. 2010. Household choices and child development. Work. Pap., Coll. Carlo
45. Alberto De Nardi M. 2004. Wealth inequality and intergenerational links. Rev. Econ. Stud. 71: 743-68
46. Duncan G, Brooks-Gunn J. 1997. Consequences of Growing Up Poor. New York: Russell Sage Found.
47. Duncan G, Morris P, Rodrigues C. 2011. Does money really matter? Estimating impacts of family income on young children's achievement with data from random-assignment experiments. Dev. Psychol. 47: 1263-79
48. Duncan G, Yeung W-J, Brooks-Gunn J, Smith J. 1998. How much does childhood poverty affect the life chances of children? Am. Sociol. Rev. 63: 406-23
49. Dynarski SM, Scott-Clayton JE. 2006. The cost of complexity in federal student aid: lessons from optimal tax theory and behavioral economics. Natl. Tax J. 59: 319-56
50. Ellwood DT, Kane TJ. 2000. Who is getting a college education? Family background and the growing gaps in enrollment. In Securing the Future: Investing in Children from Birth to College, ed. S Danziger, J Waldfogel, pp. 283-324. New York: Russell Sage
51. Found. Epple D, Romano R, Sieg H. 2006. Admission, tuition, and financial aid policies in the market for higher education. Econometrica 74: 885-928
52. Fernandez R, Rogerson R. 1998. Public education and income distribution: a dynamic quantitative evaluation of education-finance reform. Am. Econ. Rev. 88: 813-33
53. Filmer D, Pritchett L. 1999. The effect of household wealth on educational attainment: evidence from 35 countries. Popul. Dev. Rev. 25: 85-120
54. Fu C. 2011. Equilibrium tuition, applications, admissions and enrollment in the college market.Work. Pap., Univ. Wisconsin
55. Gallipoli G, Meghir C, Violante GL. 2011. Equilibrium effects of education policies: a quantitative evaluation. Work. Pap., Univ. British Columbia
56. Galor O, Zeira J. 1993. Income distribution and macroeconomics. Rev. Econ. Stud. 60: 35-52
57. Glomm G, Ravikumar B. 1992. Public versus private investment in human capital endogenous growth and income inequality. J. Polit. Econ. 100: 813-34
58. Gropp R, Scholz JK, White MJ. 1997. Personal bankruptcy and credit supply and demand. Q. J. Econ. 112: 217-51
59. Hall RE, Jones CI. 1999. Why do some countries produce so much more output per worker than others? Q. J. Econ. 114: 83-116
60. Heckman JJ. 2010. Building bridges between structural and program evaluation approaches to evaluating policy. J. Econ. Lit. 48: 356-98
61. Heckman JJ, Lochner L, Taber C. 1998. Explaining rising wage inequality: explanations with a dynamic general equilibrium model of labor earnings with heterogeneous agents. Rev. Econ. Dyn. 1: 1-58
62. Hopenhayn HA, Nicolini JP. 1997. Optimal unemployment insurance. J. Polit. Econ. 105: 412-38
63. Ionescu F. 2008. Consolidation of student loan repayments and default incentives. BE J.Macroecon. 8: 22
64. Ionescu F. 2009. The federal student loan program: quantitative implications for college enrollment and default rates. Rev. Econ. Dyn. 12: 205-31
65. Ionescu F. 2011. Risky human capital and alternative bankruptcy regimes for student loans. J. Hum. Cap. 5: 153-206
66. Johnson M. 2011. Borrowing constraints, college enrolment, and delayed entry. Work. Pap., Math. Policy Res., Princeton, NJ
67. Kaboski J. 2007. Explaining returns to schooling and output across countries. Work. Pap., Univ. Notre Dame
68. Karoly L, Greenwood PW, Everingham SS, Hoube J, Kilburn MR, et al. 1998. Investing in Our Children: What We Know and Don't Know About the Costs and Benefits of Early Childhood Interventions. Santa Monica: RAND Corp.
69. Keane M, Wolpin KI. 1997. The career decisions of young men. J. Polit. Econ. 105: 473-522
70. Keane M,Wolpin KI. 2001. The effect of parental transfers and borrowing constraints on educational attainment. Int. Econ. Rev. 42: 1051-103
71. Kinsler J, Pavan R. 2010. College quality, educational attainment, and family income. Work. Pap., Univ. Rochester
72. Klenow P, Rodriguez-Clare A. 1997. The neoclassical revival in growth economics: Has it gone too far? In NBER Macroeconomics Annual 1997, ed. BS Bernanke, JJ Rotemberg, pp. 73-114. Cambridge, MA: MIT Press
73. Krebs T. 2003. Human capital risk and economic growth. Q. J. Econ. 118: 709-44
74. Laitner J. 1992. Random earnings differences, lifetime liquidity constraints, and altruistic intergenerational transfers. J. Econ. Theory 58: 135-70
75. Lang K. 1993. Ability bias, discount rate bias and the return to education. Unpublished manuscript, Boston Univ.
76. Levy D, Duncan G. 1999. Using sibling samples to assess the effect of childhood family income on completed schooling. Work. Pap., Northwest. Univ.
77. Lochner L, Monge-Naranjo A. 2011a. Credit and insurance for human capital investments. Unpublished manuscript, Univ. Western Ontario/Pennsylvania State Univ.
78. Lochner L, Monge-Naranjo A. 2011b. The nature of credit constraints and human capital. Am. Econ. Rev. 101: 2487-529
79. Løken K. 2010. Family income and children's education: using the Norwegian oil boom as a natural experiment. Labour Econ. 17: 118-29
80. Løken K, Mogstad M, Wiswall M. 2010. What linear estimators miss: re-examining the effects of family income on child outcomes. Work. Pap., New York Univ.
81. Loury GC. 1981. Intergenerational transfers and the distribution of earnings. Econometrica 49: 843-67
82. LovenheimMF. 2011. The effect of liquid housing wealth on college enrollment.Work. Pap., Cornell Univ.
83. Lovenheim MF, Reynolds CL. 2011. Changes in postsecondary choices by ability and income: evidence from the National Longitudinal Surveys of Youth. J. Hum. Cap. 5: 70-109
84. Mankiw NG, Romer D, Weil DN. 1992. A contribution to the empirics of economic growth. Q. J. Econ. 107: 407-37
85. Manuelli RE, Seshadri A. 2010. Human capital and the wealth of nations. Work. Pap., Univ. Wisconsin
86. Meghir C, Weber G. 1996. Intertemporal nonseparability or borrowing restrictions? A disaggregate analysis using a U.S. consumption panel. Econometrica 64: 1151-81
87. Milligan K, Stabile M. 2011. Do child tax benefits affect the well-being of children? Evidence from Canadian child benefit expansions. Am. Econ. J. Econ. Policy 3: 175-205
88. Navarro S. 2010. Using observed choices to infer agent's information: reconsidering the importance of borrowing constraints, uncertainty and preferences in college attendance.Work. Pap.,Univ.Wisconsin
89. Nellie Mae Corp. 2005. Undergraduate Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends. Braintree, MA: Nellie Mae Corp.
90. Restuccia D, Urrutia C. 2004. Intergenerational persistence of earnings: the role of early and college education. Am. Econ. Rev. 94: 1354-78
91. Shimer R,Werning I. 2008. Liquidity and insurance for the unemployed. Am. Econ. Rev. 98: 1922-42
92. Stephens M Jr. 2008. The consumption response to predictable changes in discretionary income: evidence from the repayment of vehicle loans. Rev. Econ. Stat. 90: 241-52
93. Stinebrickner T, Stinebrickner R. 2008. The effect of credit constraints on the college drop-out decision: a direct approach using a new panel study. Am. Econ. Rev. 98: 2163-84
94. Stinebrickner T, Stinebrickner R. 2012. Learning about academic ability and the college drop-out decision. J. Labor Econ. In Press
95. Titus M. 2002. Supplemental Table update for trends in undergraduate borrowing: federal student loans in 1989-90, 1992-93, and 1995-96. http://nces.ed.gov/pubs2000/2000151update.pdf
96. Todd P,Wolpin KI. 2003. On the specification and estimation of the production function for cognitive achievement. Econ. J. 113: F3-33
97. Todd P, Wolpin KI. 2007. The production of cognitive achievement in children: home, school and racial test score gaps. J. Hum. Cap. 1: 91-136
98. Townsend RM. 1979. Optimal contracts and competitive markets with costly state verification. J. Econ. Theory 21: 265-93
99. Wang M. 2011. Optimal education policies under endogenous borrowing constraints. Work. Pap., Michigan State Univ.