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College student loan debt and income inequality in the US: national and regional evidence

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  • Nicholas Apergis

Abstract

Purpose - This study explores the role of rising US student loan debt in explaining income inequality. Design/methodology/approach - The study uses the autoregressive distributed lag (ARDL) modeling approach to explore the short- and long-run impact of college debt on income inequality in the US through quarterly data over the period 2000–2019. Findings - The results demonstrate the detrimental impact of student debt on national and regional income inequality. Moreover, the regional analysis highlights a more pronounced impact of student debt on income distribution in South and West regions. The findings document that these regions, with the lower student debt proportions, have the lowest average cost of attending college. Finally, the analysis explores two potential channels – i.e. race and homeownership – that could explain the link between college student debt and income inequality. Practical implications - The results can be helpful for policymakers and researchers to formulate practical approaches for assessing and addressing the rising national student debt and income inequality. Originality/value - This is the first, to the best of the author's knowledge, study that explores the impact of US college debt on income inequality.

Suggested Citation

  • Nicholas Apergis, 2022. "College student loan debt and income inequality in the US: national and regional evidence," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 50(6), pages 1210-1225, October.
    • Handle: RePEc:eme:jespps:jes-05-2022-0287
    DOI: 10.1108/JES-05-2022-0287
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    More about this item

    Keywords

    College student debt; Income inequality; US national and regional data; Autoregressive and distributed lag (ARDL) model; Mechanisms identification; D31; D63; I22; I23; I24;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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