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Credit Constraints in Higher Education in a Context of Unobserved Heterogeneity

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  • Villena, Mauricio
  • Sanchez, Rafael
  • Rojas, Eugenio

Abstract

This article tests the existence of credit constraints on higher education access by estimating actual marginal returns in the context of unobserved heterogeneity. We estimate higher education returns for those who attend to it and compare them with those of individuals who are at the margin of attending to it. Following the Carneiro and Heckman (2002) reasoning, if the returns of the latter group are larger than those of the former one we could be in presence of unobservable barriers to higher education access, such as credit constraints. We use a rich administrative database composed from three sources: data of enrollment and graduation from the Chilean higher education system, test scores and labor market outcomes from the Chilean Unemployment Insurance database. Our results suggest that, given the existing financial aid scheme, the returns for those individuals that are at the margin of attending to higher education are lower than for those who decided to attend to it. This is, no evidence of credit constraints is found for the Chilean Higher Education system. However, when conditioning on family income, we find that for the richer households some evidence of credit constraints is found.

Suggested Citation

  • Villena, Mauricio & Sanchez, Rafael & Rojas, Eugenio, 2012. "Credit Constraints in Higher Education in a Context of Unobserved Heterogeneity," MPRA Paper 62095, University Library of Munich, Germany, revised 08 Jul 2014.
    • Handle: RePEc:pra:mprapa:62095
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    References listed on IDEAS

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    More about this item

    Keywords

    Higher Education; Credit Constraints; Structural Models; Marginal Treatment Effect;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • I2 - Health, Education, and Welfare - - Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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