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Does the Student-Loan Burden Weigh into the Decision to Start a Family?

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  • Gicheva, Dora

    ()
    (University of North Carolina at Greensboro, Department of Economics)

Abstract

I examine the relationship between student debt and the timing of marriage. The life-cycle consumption smoothing model implies that student loans should have a very small effect on consumption at any given point in time and should not affect the timing of family formation. I use the Survey of Consumer Finances to show that the amount of student borrowing is negatively related to the probability of marriage, but the strength of this relationship diminishes with age. I use exogenous variations in the availability of student loans since the 1970s to address the endogeneity of student debt. I supplement my results with data from a panel survey of registrants for the Graduate Management Admission Test. Data on reported marriage expectations suggest that Master of Business Administration students who borrow for their education may not have perfect foresight.

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Bibliographic Info

Paper provided by University of North Carolina at Greensboro, Department of Economics in its series Working Papers with number 11-14.

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Length: 37 pages
Date of creation: 07 Sep 2011
Date of revision:
Handle: RePEc:ris:uncgec:2011_014

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Web page: http://www.uncg.edu/bae/econ/
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Keywords: Student Loans; Credit Constraints; Timing of Marriage;

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References

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  1. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc.
  2. Lance J. Lochner & Alexander Monge-Naranjo, 2011. "The Nature of Credit Constraints and Human Capital," American Economic Review, American Economic Association, vol. 101(6), pages 2487-2529, October.
  3. Andrew W. Horowitz & Jungmin Lee & Julie R. Trivitt, 2009. "Household-Level Education Borrowing Constraints: Evidence Using the College Attendance of the Sisters of Vietnam Draft Avoiders," Journal of Human Capital, University of Chicago Press, vol. 3(3), pages 197-223.
  4. Ralph Stinebrickner & Todd Stinebrickner, 2008. "The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study," American Economic Review, American Economic Association, vol. 98(5), pages 2163-84, December.
  5. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
  6. Carneiro, Pedro & Heckman, James J., 2002. "The Evidence on Credit Constraints in Post-Secondary Schooling," IZA Discussion Papers 518, Institute for the Study of Labor (IZA).
  7. Ionescu, Felicia & Simpson, Nicole, 2010. "Credit Scores and College Investment," Working Papers 2010-07, Department of Economics, Colgate University.
  8. Rothstein, Jesse & Rouse, Cecilia Elena, 2011. "Constrained after college: Student loans and early-career occupational choices," Journal of Public Economics, Elsevier, vol. 95(1), pages 149-163.
  9. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
  10. Peter Arcidiacono & Jane Cooley & Andrew Hussey, 2008. "The Economic Returns To An Mba," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 873-899, 08.
  11. Pedro Mira & Namkee Ahn, 2001. "Job bust, baby bust?: Evidence from Spain," Journal of Population Economics, Springer, vol. 14(3), pages 505-521.
  12. Bazzoli, Gloria J., 1985. "Does educational indebtedness affect physician specialty choice?," Journal of Health Economics, Elsevier, vol. 4(1), pages 1-19, March.
  13. Minicozzi, Alexandra, 2005. "The short term effect of educational debt on job decisions," Economics of Education Review, Elsevier, vol. 24(4), pages 417-430, August.
  14. Jappelli, Tullio, 1990. "Who Is Credit Constrained in the U.S. Economy?," The Quarterly Journal of Economics, MIT Press, vol. 105(1), pages 219-34, February.
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Cited by:
  1. Elliott, William & Nam, IlSung, 2013. "Is student debt jeopardizing the short-term financial health of U.S. households?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 405-424.
  2. Christopher Avery & Sarah Turner, 2012. "Student Loans: Do College Students Borrow Too Much--Or Not Enough?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 165-92, Winter.

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