IDEAS home Printed from https://ideas.repec.org/p/iae/iaewps/wp2014n24.html
   My bibliography  Save this paper

Evidence on Credit Constraints, University Attendance and Income Contingent Loans

Author

Listed:
  • Buly A. Cardak

    (School of Economics, La Trobe University)

  • Chris Ryan

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

The effects of credit constraints on university participation are investigated in a setting where income contingent tuition loans are available to students. Students most likely to face credit constraints have the same or higher probability of attending university as all other students, given their high school achievement. A novel approach to handle potential bias arising from unobserved heterogeneity is proposed. An estimate of unobservable heterogeneity based on post-secondary plans reported during ninth grade is constructed. This estimate is found to explain university attendance but does not overturn results regarding the effects of credit constraints.

Suggested Citation

  • Buly A. Cardak & Chris Ryan, 2014. "Evidence on Credit Constraints, University Attendance and Income Contingent Loans," Melbourne Institute Working Paper Series wp2014n24, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2014n24
    as

    Download full text from publisher

    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2014n24.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephen V. Cameron & Christopher Taber, 2004. "Estimation of Educational Borrowing Constraints Using Returns to Schooling," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 132-182, February.
    2. Guildo W. Imbens, 2003. "Sensitivity to Exogeneity Assumptions in Program Evaluation," American Economic Review, American Economic Association, vol. 93(2), pages 126-132, May.
    3. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521355643, November.
    4. Ralph Stinebrickner & Todd Stinebrickner, 2008. "The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study," American Economic Review, American Economic Association, vol. 98(5), pages 2163-2184, December.
    5. Chapman, Bruce, 1997. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," Economic Journal, Royal Economic Society, vol. 107(442), pages 738-751, May.
    6. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    7. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
    8. Chapman, Bruce, 2006. "Income Contingent Loans for Higher Education: International Reforms," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 25, pages 1435-1503, Elsevier.
    9. Buly A. Cardak & Joe Vecci, 2016. "Graduates, Dropouts and Slow Finishers: The Effects of Credit Constraints on University Outcomes," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(3), pages 323-346, June.
    10. Lorraine Dearden & Leslie McGranahan & Barbara Sianesi, 2004. "The Role of Credit Constraints in Educational Choices: Evidence from NCDS and BCS70," CEE Discussion Papers 0048, Centre for the Economics of Education, LSE.
    11. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
    12. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
    13. Buly A. Cardak & Chris Ryan, 2009. "Participation in Higher Education in Australia: Equity and Access," The Economic Record, The Economic Society of Australia, vol. 85(271), pages 433-448, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeff Borland & Michael Coelli, 2016. "Labour Market Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 92(299), pages 517-547, December.
    2. Buly A. Cardak & Joe Vecci, 2016. "Graduates, Dropouts and Slow Finishers: The Effects of Credit Constraints on University Outcomes," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(3), pages 323-346, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Buly A. Cardak & Joe Vecci, 2016. "Graduates, Dropouts and Slow Finishers: The Effects of Credit Constraints on University Outcomes," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(3), pages 323-346, June.
    2. Gurgand, Marc & Lorenceau, Adrien & Mélonio, Thomas, 2023. "Student loans: Credit constraints and higher education in South Africa," Journal of Development Economics, Elsevier, vol. 161(C).
    3. Bryan A. Stuart, 2022. "The Long-Run Effects of Recessions on Education and Income," American Economic Journal: Applied Economics, American Economic Association, vol. 14(1), pages 42-74, January.
    4. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2021. "Parental Resources and College Attendance: Evidence from Lottery Wins," American Economic Review, American Economic Association, vol. 111(4), pages 1201-1240, April.
    5. Philippe Belley & Marc Frenette & Lance Lochner, 2010. "Post-Secondary Attendance by Parental Income: Comparing the U.S. and Canada," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20103, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    6. Buly A Cardak & Chris Ryan, 2006. "Why are high ability individuals from poor backgrounds under-represented at university?," Working Papers 2006.04, School of Economics, La Trobe University.
    7. Mariana Alfonso, 2009. "Credit Constraints and the Demand for Higher Education in Latin America," IDB Publications (Working Papers) 9314, Inter-American Development Bank.
    8. Alfonso, Mariana, 2009. "Credit Constraints and the Demand for Higher Education in Latin America," IDB Publications (Working Papers) 2526, Inter-American Development Bank.
    9. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Journal of Human Capital, University of Chicago Press, vol. 1(1), pages 37-89.
    10. Braxton, John Carter & Chikhale, Nisha & Herkenhoff, Kyle & Phillips, Gordon, 2024. "Intergenerational Mobility and Credit," IZA Discussion Papers 16826, Institute of Labor Economics (IZA).
    11. Rothstein, Jesse & Rouse, Cecilia Elena, 2011. "Constrained after college: Student loans and early-career occupational choices," Journal of Public Economics, Elsevier, vol. 95(1-2), pages 149-163, February.
    12. Lance J. Lochner & Alexander Monge-Naranjo, 2011. "The Nature of Credit Constraints and Human Capital," American Economic Review, American Economic Association, vol. 101(6), pages 2487-2529, October.
    13. Helena Skyt Nielsen & Torben Sørensen & Christopher Taber, 2010. "Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform," American Economic Journal: Economic Policy, American Economic Association, vol. 2(2), pages 185-215, May.
    14. Christian Belzil & Arnaud Maurel & Modibo Sidibé, 2021. "Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment," Journal of Labor Economics, University of Chicago Press, vol. 39(2), pages 361-395.
    15. John Jerrim & Anna Vignoles & Ross Finnie, 2012. "University access for disadvantaged children: A comparison across English speaking countries," DoQSS Working Papers 12-11, Quantitative Social Science - UCL Social Research Institute, University College London.
    16. Hassani-Nezhad, Lena & Anderberg, Dan & Chevalier, Arnaud & Lührmann, Melanie & Pavan, Ronni, 2021. "Higher education financing and the educational aspirations of teenagers and their parents," Economics of Education Review, Elsevier, vol. 85(C).
    17. Jeffrey T. Denning & Todd R. Jones, 2021. "Maxed Out?: The Effect of Larger Student Loan Limits on Borrowing and Education Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 56(4), pages 1113-1140.
    18. Nicholas Lawson, 2014. "Liquidity Constraints, Fiscal Externalities and Optimal Tuition Subsidies Optimal College Tuition Subsidies," AMSE Working Papers 1404, Aix-Marseille School of Economics, France, revised 18 Mar 2014.
    19. Wolfram F. Richter & Berthold U. Wigger, 2012. "Besteuerung des Humanvermögens," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 13(1-2), pages 82-102, February.
    20. Steven J. Haider & Kathleen McGarry, 2018. "Postsecondary Schooling and Parental Resources: Evidence from the PSID and HRS," Education Finance and Policy, MIT Press, vol. 13(1), pages 72-96, Winter.

    More about this item

    Keywords

    University participation; credit constraints; unobservables;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2014n24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sheri Carnegie (email available below). General contact details of provider: https://edirc.repec.org/data/mimelau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.