The Nature of Credit Constraints and Human Capital
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TLDR
This paper developed a human capital model with borrowing constraints explicitly derived from government student loan (GSL) programs and private lending under limited commitment, which helps explain the persistent strong positive correlation between ability and schooling in the U.S., as well as the rising importance of family income for college attendance.Abstract:
We develop a human capital model with borrowing constraints explicitly derived from government student loan (GSL) programs and private lending under limited commitment. The model helps explain the persistent strong positive correlation between ability and schooling in the U.S., as well as the rising importance of family income for college attendance. It also explains the increasing share of undergraduates borrowing the GSL maximum and the rise in student borrowing from private lenders. Our framework ofiers new insights regarding the interaction of government and private lending as well as the responsiveness of private credit to economic and policy changes.read more
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Journal ArticleDOI
Student Loan Supply, Parental Saving & Portfolio Allocation
TL;DR: This article found that an expansion of student loan supply affects parents' saving decisions and portfolio allocation, and that the positive effect of student aid on students' college enrollment was strongest among lower-and middle-income families.
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The Interplay Between Student Loans and Credit Cards: Implications for Default
Felicia Ionescu,Marius Ionescu +1 more
TL;DR: In this paper, the authors analyzed the relationship between two different forms of unsecured credit and their implications for default behavior of young U.S. households and showed that the institutional differences between the two markets make borrowers prefer defaulting on student loans rather than on credit card debt.
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Study for Nothing? Gender and Access to Higher Education in a Developing Country
Are Chinese Paying Too Much or Too Little for School Quality? The Rent Yield Gap Approach for Estimating the Capitalization of School Quality in Shanghai
Muyang Zhang,Jie Chen +1 more
TL;DR: In this paper, the unequal right of enrollment for public schools between households with different tenure statuses in urban People's Republic of China (PRC) affects rental yields, and the results of education equalization programs in terms of educational and residential segregation and intergenerational mobility are analyzed.
Information, Finance and Wage Inequality
TL;DR: In this article, the authors employ a model of signaling with credit constraints and private employer learning to provide a microfounded justification for the increase in wage inequality in the US over the past four decades.
References
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Changes in the Wage Structure and Earnings Inequality
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Interpreting the evidence on life cycle skill formation
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Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males
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