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The effect of student loans on college enrollment: Evidence from municipality panel data in Japan

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  • Sano, Shinpei

Abstract

This study examines whether the criteria expansion for student loan eligibility promotes the college enrollment of high school graduates in Japan. In 1999, the Japan Student Services Organization revised the eligibility criteria of the student loan system based on household earnings. Before the revision, the maximum allowable earnings for student loan applications differed across regions; some region’s had lower criteria than others. After the revision, the criteria for regions with lower maximum allowable earnings were adjusted upwards to match regions with higher ones. We conducted a difference-in-differences estimation by using municipal panel data from 1998 to 2003. We found that the expansion of eligibility for student loans improved the male college enrollment rate by around 0.5 to 0.7% points, while female enrollment was less sensitive to the expansion of student loan eligibility. The impact of the student loan eligibility expansion is larger for low income areas.

Suggested Citation

  • Sano, Shinpei, 2019. "The effect of student loans on college enrollment: Evidence from municipality panel data in Japan," Japan and the World Economy, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:japwor:v:52:y:2019:i:c:s092214251930009x
    DOI: 10.1016/j.japwor.2019.100979
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    Cited by:

    1. Xianbo Li, 2022. "Sequence Model and Prediction for Sustainable Enrollments in Chinese Universities," Sustainability, MDPI, vol. 15(1), pages 1-25, December.
    2. Naoi, Michio & Akabayashi, Hideo & Nakamura, Ryosuke & Nozaki, Kayo & Sano, Shinpei & Senoh, Wataru & Shikishima, Chizuru, 2021. "Causal effects of family income on educational investment and child outcomes: Evidence from a policy reform in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    College enrollment; Student loans; Difference-in-differences;
    All these keywords.

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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