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Labor Market Returns to Student Loans

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  • Alonso Bucarey
  • Dante Contreras
  • Pablo Muñoz

Abstract

This paper studies the labor market returns to a state guaranteed loan (SGL) used to finance university degrees. Using administrative data from Chile and a regression discontinuity design, we show that nine years after high school graduation students who enrolled at a university thanks to the SGL attended it for 5 years, foregoing 3 years of vocational education and accumulating additional 14 thousand dollars in student debt. Strikingly, these students do not benefit in terms wages, employment, type of contract, or type of employer. The low quality of institutions attended by loan users may account for these results.

Suggested Citation

  • Alonso Bucarey & Dante Contreras & Pablo Muñoz, 2018. "Labor Market Returns to Student Loans," Working Papers wp464, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp464
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    File URL: http://www.econ.uchile.cl/uploads/publicacion/40da7d60fc3c326fedf765a59072b9315290d6c9.pdf
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    References listed on IDEAS

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    Cited by:

    1. David Card & Alex Solis, 2022. "Measuring the Effect of Student Loans on College Persistence," Education Finance and Policy, MIT Press, vol. 17(2), pages 335-366, Spring.
    2. Montoya, Ana Maria & Noton, Carlos & Solis, Alex, 2018. "The Returns to College Choice: Loans, Scholarships and Labor Outcomes," Working Paper Series 2018:12, Uppsala University, Department of Economics.
    3. Solis, Alex, 2019. "Measuring the Effect of Student Loans on the College Dropout Rate," Working Paper Series 2019:8, Uppsala University, Department of Economics.

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