IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v105y2015i5p508-13.html

Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile

Author

Listed:
  • Harald Beyer
  • Justine Hastings
  • Christopher Neilson
  • Seth Zimmerman

Abstract

Rising student loan default rates and protests over debt suggest that many students make college enrollment and financing choices they regret. Policymakers have considered tying the availability of federally subsidized loans at degree programs to financial outcomes for past students. This paper considers the implementation of such a policy in Chile. We describe how loan repayment varied by degree type at baseline, the design of the loan reform, and how earnings-based loan caps change availability of loans and incentives for students and higher education institutions. We discuss the challenges facing policymakers seeking to link loan availability to earnings outcomes.

Suggested Citation

  • Harald Beyer & Justine Hastings & Christopher Neilson & Seth Zimmerman, 2015. "Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile," American Economic Review, American Economic Association, vol. 105(5), pages 508-513, May.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:508-13
    Note: DOI: 10.1257/aer.p20151026
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.p20151026
    Download Restriction: no
    File URL: https://www.aeaweb.org/aer/ds/10505/P2015_1026_ds.zip
    Download Restriction: no
    File URL: https://www.aeaweb.org/aer/data/10505/P2015_1026_data.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Courty, Pascal & Marschke, Gerald, 1997. "Measuring Government Performance: Lessons from a Federal Job-Training Program," American Economic Review, American Economic Association, vol. 87(2), pages 383-388, May.
    2. Thomas N. Hubbard, 2009. "Specialization, Firms, and Markets: The Division of Labor within and between Law Firms," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 25(2), pages 339-371, October.
    3. Judith Scott-Clayton, 2012. "Information Constraints and Financial Aid Policy," NBER Working Papers 17811, National Bureau of Economic Research, Inc.
    4. Jeff Grogger & Eric Eide, 1995. "Changes in College Skills and the Rise in the College Wage Premium," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 280-310.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Natalie Cox, 2017. "Pricing, Selection, and Welfare in the Student Loan Market: Evidence from Borrower Repayment Decisions," Working Papers 2017-2, Princeton University. Economics Department..
    2. Christopher A. Neilson, 2021. "Targeted Vouchers, Competition Among Schools, and the Academic Achievement of Poor Students," Working Papers 2021-48, Princeton University. Economics Department..
    3. Ana Maria Montoya & Carlos Noton & Alex Solis, 2017. "Returns to Higher Education: Vocational Education vs College," Documentos de Trabajo 334, Centro de Economía Aplicada, Universidad de Chile.
    4. Justine Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2015. "The Effects of Earnings Disclosure on College Enrollment Decisions," Working Papers 2015-1, Princeton University. Economics Department..
    5. Juliana Londono-Velez & Catherine Rodriguez & Fabio SÔøΩnchez?, 2017. "The Intended and Unintended Impacts of a Merit-Based Financial Aid Program for the Poor: The Case of Ser Pilo Paga," Documentos CEDE 15466, Universidad de los Andes, Facultad de Economía, CEDE.
    6. Hastings, Justine S. & Neilson, Christopher A. & Ramirez, Anely & Zimmerman, Seth D., 2016. "(Un)informed college and major choice: Evidence from linked survey and administrative data," Economics of Education Review, Elsevier, vol. 51(C), pages 136-151.
    7. Huntington-Klein, Nick, 2016. "“(Un)informed College and Major Choice”: Verification in an alternate setting," Economics of Education Review, Elsevier, vol. 53(C), pages 159-163.
    8. Pernagallo, Giuseppe, 2024. "The student funding dilemma," The Journal of Economic Asymmetries, Elsevier, vol. 30(C).
    9. Fryer, Roland G., 2016. "Information, non-financial incentives, and student achievement: Evidence from a text messaging experiment," Journal of Public Economics, Elsevier, vol. 144(C), pages 109-121.
    10. Castro-Zarzur, Rosa & Espinoza, Ricardo & Sarzosa, Miguel, 2022. "Unintended consequences of free college: Self-selection into the teaching profession," Economics of Education Review, Elsevier, vol. 89(C).
    11. Angell, Mintaka & Gold, Samantha & Hastings, Justine S. & Howison, Mark & Jensen, Scott & Keleher, Niall & Molitor, Daniel & Roberts, Amelia, 2021. "Estimating value-added returns to labor training programs with causal machine learning," OSF Preprints thg23, Center for Open Science.
    12. Alonso Bucarey & Dante Contreras & Pablo Muñoz, 2018. "Labor Market Returns to Student Loans," Working Papers wp464, University of Chile, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas Buser & Muriel Niederle & Hessel Oosterbeek, 2014. "Gender, Competitiveness, and Career Choices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1409-1447.
    2. Ralph Stinebrickner & Todd R. Stinebrickner, 2014. "A Major in Science? Initial Beliefs and Final Outcomes for College Major and Dropout," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 426-472.
    3. Guido Friebel & Matthias Heinz & Miriam Krueger & Nikolay Zubanov, 2017. "Team Incentives and Performance: Evidence from a Retail Chain," American Economic Review, American Economic Association, vol. 107(8), pages 2168-2203, August.
    4. Hanming Fang & Chang Liu & Li-An Zhou, 2020. "Window Dressing in the Public Sector: A Case Study of China’s Compulsory Education Promotion Program," NBER Working Papers 27628, National Bureau of Economic Research, Inc.
    5. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    6. Wayne A. Grove & Andrew Hussey, 2011. "Returns To Field Of Study Versus School Quality: Mba Selection On Observed And Unobserved Heterogeneity," Economic Inquiry, Western Economic Association International, vol. 49(3), pages 730-749, July.
    7. Tarun Jain & Abhiroop Mukhopadhyay & Nishith Prakash & Raghav Rakesh, 2022. "Science education and labor market outcomes in a developing economy," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 741-763, April.
    8. Murinde, Victor, 2001. "Financing Business School Education: What Are the Economic Returns and Implications for Africa?," General Discussion Papers 30565, University of Manchester, Institute for Development Policy and Management (IDPM).
    9. Thomas (T.) Buser & Noemi Peter & Stefan Wolter, 2017. "Gender, Willingness to Compete and Career Choices Along the Whole Ability Distribution," Tinbergen Institute Discussion Papers 17-081/I, Tinbergen Institute.
    10. Stark, Oded & Byra, Lukasz & Casarico, Alessandra & Uebelmesser, Silke, 2017. "A critical comparison of migration policies: Entry fee versus quota," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 91-107.
    11. Kang, Changhui, 2007. "Classroom peer effects and academic achievement: Quasi-randomization evidence from South Korea," Journal of Urban Economics, Elsevier, vol. 61(3), pages 458-495, May.
    12. Helen Simpson, 2009. "Productivity In Public Services," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 250-276, April.
    13. Eleanor Wiske Dillon & Jeffrey Andrew Smith, 2020. "The Consequences of Academic Match between Students and Colleges," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 767-808.
    14. Rose, Heather, 2006. "Do gains in test scores explain labor market outcomes?," Economics of Education Review, Elsevier, vol. 25(4), pages 430-446, August.
    15. Todd Stinebrickner & Ralph Stinebrickner & Paul Sullivan, 2018. "Job Tasks and the Gender Wage Gap among College Graduates," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20183, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    16. Katja Görlitz & Barbara S. Grave, 2012. "Wage Differentials by Field of Study – The Case of German University Graduates," Ruhr Economic Papers 0316, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    17. David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1593-1640.
    18. Frauke H. Peter & Vaishali Zambre, 2014. "Wer studiert, ist informiert?: Studienentscheidungen und Informationsdefizite," DIW Roundup: Politik im Fokus 35, DIW Berlin, German Institute for Economic Research.
    19. Menta, Giorgia & Lepinteur, Anthony & Clark, Andrew E. & Ghislandi, Simone & D’Ambrosio, Conchita, 2021. "Maternal depression and child human capital: A genetic instrumental-variable approach," CEPREMAP Working Papers (Docweb) 2107, CEPREMAP.
    20. Dan A. Black & Amelia M. Haviland & Seth G. Sanders & Lowell J. Taylor, 2008. "Gender Wage Disparities among the Highly Educated," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 630-659.

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:508-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.