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Does the Student-Loan Burden Weigh into the Decision to Start a Family?

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  • Gicheva, Dora

    (University of North Carolina at Greensboro, Department of Economics)

Abstract

I examine the relationship between student debt and the timing of marriage. The life-cycle consumption smoothing model implies that student loans should have a very small effect on consumption at any given point in time and should not affect the timing of family formation. I use the Survey of Consumer Finances to show that the amount of student borrowing is negatively related to the probability of marriage, but the strength of this relationship diminishes with age. I use exogenous variations in the availability of student loans since the 1970s to address the endogeneity of student debt. I supplement my results with data from a panel survey of registrants for the Graduate Management Admission Test. Data on reported marriage expectations suggest that Master of Business Administration students who borrow for their education may not have perfect foresight.

Suggested Citation

  • Gicheva, Dora, 2011. "Does the Student-Loan Burden Weigh into the Decision to Start a Family?," UNCG Economics Working Papers 11-14, University of North Carolina at Greensboro, Department of Economics.
    • Handle: RePEc:ris:uncgec:2011_014
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    References listed on IDEAS

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    Cited by:

    1. Marco Di Maggio & Ankit Kalda & Vincent Yao, 2019. "Second Chance: Life without Student Debt," NBER Working Papers 25810, National Bureau of Economic Research, Inc.
    2. Rajeev Darolia, 2013. "Student Loan Repayment and College Accountability," Consumer Finance Institute discussion papers 13-5, Federal Reserve Bank of Philadelphia.
    3. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.
    4. Julie Miller & Samantha Brady & Alexa Balmuth & Lisa D’Ambrosio & Joseph Coughlin, 2021. "Student Loans at the Dinner Table: Family Communication Patterns About Student Loans Before Accrual and During Repayment," Journal of Family and Economic Issues, Springer, vol. 42(2), pages 251-271, June.
    5. Manuel S. González Canché, 2017. "Financial Benefits of Rapid Student Loan Repayment: An Analytic Framework Employing Two Decades of Data," The ANNALS of the American Academy of Political and Social Science, , vol. 671(1), pages 154-182, May.
    6. William Elliott & IlSung Nam, 2013. "Is student debt jeopardizing the short-term financial health of U.S. households?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 405-424.
    7. Christopher Avery & Sarah Turner, 2012. "Student Loans: Do College Students Borrow Too Much--Or Not Enough?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 165-192, Winter.

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    More about this item

    Keywords

    Student Loans; Credit Constraints; Timing of Marriage;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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