Skills, Schools, and Credit Constraints: Evidence from Massachusetts
AbstractLow college enrollment rates among low income students may stem from credit constraints, low academic skill, low quality schools, or some combination of these. Recent Massachusetts data allow the first use of school district fixed effects in the analysis of credit constraints, leading to four primary findings. First, Massachusetts' low income students have lower intended college enrollment rates than higher income students but also have dramatically lower skills and attend lower quality school districts. Second, inclusion of skill controls greatly reduces but does not eliminate the intended enrollment gap, with low income students seven percentage points less likely to intend enrollment than similarly skilled higher income students. Third, in districts where higher income students are plausibly unconstrained, inclusion of school district fixed effects does little to reduce intended enrollment gaps, with low income students nine percentage points less likely to intend enrollment than similarly skilled higher income students from the same school district. Fourth, low income students in the middle and upper parts of the skill distribution appear the most constrained, particularly with respect to four-year public colleges. State governments could use the methods employed here to identify credit constrained student populations in order to target financial aid more efficiently.
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Bibliographic InfoPaper provided by Columbia University, Department of Economics in its series Discussion Papers with number 0809-03.
Date of creation: 2008
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Other versions of this item:
- Joshua Goodman, 2010. "Skills, Schools, and Credit Constraints: Evidence from Massachusetts," Education Finance and Policy, MIT Press, vol. 5(1), pages 36-53, January.
- Goodman, Joshua Samuel, 2010. "Skills, Schools, and Credit Constraints: Evidence from Massachusetts," Scholarly Articles 8058414, Harvard Kennedy School of Government.
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
- H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-11 (All new papers)
- NEP-EDU-2008-11-11 (Education)
- NEP-LAB-2008-11-11 (Labour Economics)
- NEP-URE-2008-11-11 (Urban & Real Estate Economics)
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- María Noelia Garbero, 2012. "Efectos de las restricciones de liquidez en la acumulación de capital humano: evidencia para Nicaragua," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 53-95, January-D.
- María Noelia Garbero, 2012. "Un análisis de los efectos de las restricciones de liquidez en la acumulación de capital humano: Evidencia para Nicaragua," CEDLAS, Working Papers 0136, CEDLAS, Universidad Nacional de La Plata.
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