Sorokina, Olga V. (2008): Credit Constraints in the Demand for Education: Evidence from Survey Data.
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How important are liquidity constraints in the demand for college education in the U.S.? Who is most likely to be affected? Persistent credit constraints can lead to inefficient skill allocations and, given the wide gap between college and high school earnings, can work to perpetuate imbalances in the distribution of economic well-being. Unfortunately, empirical evidence regarding the pervasiveness of credit constraints in the demand for college education has not been consistent in part because constraints tend to be inferred indirectly and approaches for gauging them differ. In contrast with existing studies I use a measure that is more direct, namely self-reported financial constraints available in the National Longitudinal Survey of Youth. I find that about 13 percent of college-age individuals expect to underinvest in education because of financial limitations. These are the youths from less well-off families who live in areas with no universities in the vicinity. The findings of this paper suggest that liquidity constraints are potentially more pervasive than earlier studies indicate.
|Item Type:||MPRA Paper|
|Original Title:||Credit Constraints in the Demand for Education: Evidence from Survey Data|
|Keywords:||Credit Constraints, Expectations, Demand for Education|
|Subjects:||I - Health, Education, and Welfare > I2 - Education and Research Insititutions
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations; Speculations
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Depositing User:||Olga Sorokina|
|Date Deposited:||05. Dec 2008 01:17|
|Last Modified:||18. Feb 2013 23:59|
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