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Life After Debt: Postgraduation Consequences Of Federal Student Loans

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  • Martin Gervais
  • Nicolas L. Ziebarth

Abstract

We estimate the causal effect of student loans on postgraduation labor market outcomes exploiting a kink in the formula determining eligibility for need‐based student loans. Using a representative sample of students graduating with a bachelor's degree in 1993, we find that student debt has nonnegative effects on earnings. This result holds with differing levels of statistical significance across a battery of different empirical designs: (1) ordinary least squares, (2) partially linear, and (3) regression kink. We find similar results for the 2008 graduating cohort. (JEL I22, I26, J32, J33)

Suggested Citation

  • Martin Gervais & Nicolas L. Ziebarth, 2019. "Life After Debt: Postgraduation Consequences Of Federal Student Loans," Economic Inquiry, Western Economic Association International, vol. 57(3), pages 1342-1366, July.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:3:p:1342-1366
    DOI: 10.1111/ecin.12763
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    Cited by:

    1. Mi Luo & Simon Mongey, 2019. "Assets and Job Choice: Student Debt, Wages and Amenities," NBER Working Papers 25801, National Bureau of Economic Research, Inc.
    2. Britton, Jack & Gruber, Jonathan, 2020. "Do income contingent student loans reduce labor supply?," Economics of Education Review, Elsevier, vol. 79(C).
    3. Mi Luo & Simon Mongey, 2019. "Assets and Job Choice: Student Debt, Wages, and Job Satisfaction," 2019 Meeting Papers 1220, Society for Economic Dynamics.

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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