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The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study

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  • Ralph Stinebrickner
  • Todd Stinebrickner

Abstract

A serious difficulty in determining the importance of credit constraints in education arises because standard data sources do not provide a direct way of identifying which students are credit constrained. This paper differentiates itself from previous work by taking a direct approach, made possible by unique longitudinal data from the Berea Panel Study. The results from our study of Berea College students suggest that, while credit constraints likely play an important role in the drop-out decisions of some students, the large majority of attrition of students from low-income families should be primarily attributed to reasons other than credit constraints. (JEL I21, I22)

Suggested Citation

  • 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 2163-2184, December.
  • Handle: RePEc:aea:aecrev:v:98:y:2008:i:5:p:2163-84
    Note: DOI: 10.1257/aer.98.5.2163
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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    1. The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study (AER 2008) in ReplicationWiki

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