Title

The Effects of Credit Constraints in College on Human Capital and Labor Supply

Publication Date

1-1-2016

Grant Type

Early Career Research Award

Description

A key insight of labor economics is that credit constraints may reduce human capital investment. Much of the financial aid policy for college in the United States has attempted to address this concern by providing loans and grants to accommodate low-income students. However, surprisingly little work has tried to directly measure how many students are credit constrained. I propose to use a discontinuous change in student eligibility for grants and loans to estimate how many students are credit constrained. I further will show the effects of additional financial aid (and the easing of credit constraints) on credits attempted, graduation, and labor supply.

Grant Product

Born Under a Lucky Star: Financial Aid, College Completion, Labor Supply, and Credit Constraints
Upjohn Institute Working Paper No. 17-267, 2017

Denning, Jeffrey T. 2017. "Born under a Lucky Star Financial Aid, College Completion, Labor Supply, and Credit Constraints." The Journal of Human Resources 54(3): 760-784. https://doi.org/10.3368/jhr.54.3.1116.8359R1

ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare
Upjohn Institute Working Paper No. 17-280, 2017

Denning, Jeffrey T., Benjamin M. Marx, and Lesley J. Turner. 2019. "ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare." American Economic Journal: Applied Economics 11(3): 193-224. https://www.aeaweb.org/articles?id=10.1257/app.20180100

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