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Liquidity constraints and the cyclicality of college enrollment in the United States

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  • Michael S. Christian

Abstract

Liquidity constraints have a procyclical influence on college enrollment, as people with limited borrowing power have more trouble affording college during recessions. Consequently, if enrollment is influenced by liquidity constraints, people who are more likely to be constrained may enroll more procyclically. Using Current Population Survey data over 1968--2000, I do not find substantive differences in the cyclicality of enrollment across homeowning and non-homeowning households. However, I find significantly more procyclical enrollment among people in households expected to have lower incomes. These findings offer mixed evidence for the historical influence of liquidity constraints on college enrollment in the United States. Copyright 2007, Oxford University Press.

Suggested Citation

  • Michael S. Christian, 2007. "Liquidity constraints and the cyclicality of college enrollment in the United States," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 141-169, January.
    • Handle: RePEc:oup:oxecpp:v:59:y:2007:i:1:p:141-169
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    Cited by:

    1. Peter Cappelli, 2014. "Skill Gaps, Skill Shortages and Skill Mismatches: Evidence for the US," NBER Working Papers 20382, National Bureau of Economic Research, Inc.
    2. Cáceres-Delpiano, Julio & Giolito, Eugenio & Castillo, Sebastián, 2018. "Early impacts of college aid," Economics of Education Review, Elsevier, vol. 63(C), pages 154-166.
    3. Fethke, Gary, 2011. "A low-subsidy problem in public higher education," Economics of Education Review, Elsevier, vol. 30(4), pages 617-626, August.
    4. Alessandrini, Diana, 2018. "Is post-secondary education a safe port and for whom? Evidence from Canadian data," Economics of Education Review, Elsevier, vol. 67(C), pages 1-13.
    5. John Bound & Sarah Turner, 2007. "Understanding the Increased Time to the Baccalaureate Degree," Discussion Papers 06-043, Stanford Institute for Economic Policy Research.
    6. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    7. Adamopoulou, Effrosyni & Tanzi, Giulia M., 2014. "Academic Performance and the Great Recession," MPRA Paper 54913, University Library of Munich, Germany.
    8. Emanuela Ghignoni, 2015. "Family background and university dropouts during the crisis: the case of Italy," Working Papers in Public Economics 169, University of Rome La Sapienza, Department of Economics and Law.
    9. Alessandrini, Diana & Kosempel, Stephen & Stengos, Thanasis, 2015. "The business cycle human capital accumulation nexus and its effect on hours worked volatility," Journal of Economic Dynamics and Control, Elsevier, vol. 51(C), pages 356-377.
    10. Sara Ayllón & Natalia Nollenberger, 2021. "The Unequal Opportunity For Skills Acquisition During The Great Recession In Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 289-316, June.
    11. Bonacini, Luca, 2020. "Unequal effects of the economic cycle on human capital investment. Evidence from Italian panel data," GLO Discussion Paper Series 733, Global Labor Organization (GLO).
    12. David Ansong & Gina Chowa & Rainier Masa & Mathieu Despard & Michael Sherraden & Shiyou Wu & Isaac Osei-Akoto, 2019. "Effects of Youth Savings Accounts on School Attendance and Academic Performance: Evidence from a Youth Savings Experiment," Journal of Family and Economic Issues, Springer, vol. 40(2), pages 269-281, June.
    13. Michael S. Christian, 2017. "Net Investment and Stocks of Human Capital in the United States, 1975-2013," International Productivity Monitor, Centre for the Study of Living Standards, vol. 33, pages 128-149, Fall.
    14. Nam, Yunju & Huang, Jin, 2009. "Equal opportunity for all? Parental economic resources and children's educational attainment," Children and Youth Services Review, Elsevier, vol. 31(6), pages 625-634, June.
    15. Diana Alessandrini, 2014. "On the Cyclicality of Schooling Decisions: Evidence from Canadian Data," Working Paper series 16_14, Rimini Centre for Economic Analysis.
    16. Johnson, Matthew T., 2013. "The impact of business cycle fluctuations on graduate school enrollment," Economics of Education Review, Elsevier, vol. 34(C), pages 122-134.
    17. Jennifer Graves & Zoë Kuehn, 2022. "Higher education decisions and macroeconomic conditions at age eighteen," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(1), pages 171-241, May.

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