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Liberty for More: Finance and Educational Opportunities

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  • Ross Levine
  • Yona Rubinstein

Abstract

Banking reforms--that reduced interest rates--boosted college enrollment rates among able students from middle class families. We define "able" students as those with learning aptitude scores in the top two-thirds of the U.S. population. We define "middle class" as families in which both parents are not highly-educated (above 12 years of education) and that are neither in the bottom fourth nor in the top 10 percent of the distribution family income in the U.S. Our findings suggest that credit conditions, the ability of an individual to benefit from college, and a family's financial and educational circumstances combine to shape college decisions. The functioning of the financial system plays a powerful role in shaping the degree to which a child's educational choices--and hence economic opportunities--are defined by parental income.

Suggested Citation

  • Ross Levine & Yona Rubinstein, 2013. "Liberty for More: Finance and Educational Opportunities," NBER Working Papers 19380, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19380
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    References listed on IDEAS

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    Cited by:

    1. Patrick Reilly, 2016. "Bank Branching Deregulation and High School Graduation," Working Papers 16-29, Department of Economics, West Virginia University.
    2. Popov, Alexander & Zaharia, Sonia, 2017. "Credit market competition and the gender gap: evidence from local labor markets," Working Paper Series 2086, European Central Bank.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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