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Credit Constraints and Human Capital (ECO-AD-CREDCONS)

ECO-AD-CREDCONS

Purpose

Course Abstract (including student assessment):
This course will discuss credit constraints and imperfect insurance in the market for human capital.  The course will emphasize the link between theory and empirics, as well as policy (including student loan programs).  Both equity and efficiency implications will be discussed.

Students will be expected to read papers discussed in detail and to complete a problem set.

Course outline (* will be discussed in detail):

Lecture 1 (Lochner):
*Lochner, L. & Monge-Naranjo, A. (2012), “Credit Constraints in Education”, Annual Review of Economics 4, 225-56.
Keane, M. & Wolpin, K. (2001), “The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment”, International Economic Review 42(4), 1051-1103.
Johnson, M. (2013), “Borrowing Constraints, College Enrolment, and Delayed Entry”, Journal of Labor Economics 31(4), 669-725.
Cameron, S. & Taber, C. (2004), “Estimation of Educational Borrowing Constraints Using Returns to Schooling”, Journal of Political Economy 112(1), 132-82.

Stinebrickner, T. & Stinebrickner, R. (2008), “The Effect of Credit Constraints on the College Drop-Out Decision: A Direct Approach Using a New Panel Study”, American Economic Review 98(5), 2163-84.
Belzil, C., Maurel, A. & Sidibe, M. (2017). “Estimating the Value of Higher Education Financial Aid: Evidence from a Field Experiment”, Journal of Labor Economics 39(2), 361-395.
Brown, M., Scholz, J. K. & Seshadri, A. (2011), “A New Test of Borrowing Constraints for Education”, Review of Economic Studies 79(2), 511-38.
Hai, R. & Heckman, J. (2017). “Inequality in Human Capital and Endogenous Credit Constraints”, Review of Economic Dynamics 25, 4-36.

Lecture 2 (Caucutt):
*Caucutt, E., & Kumar, K. (2003). Higher education subsidies and heterogeneity: A dynamic analysis. Journal of Economic Dynamics and Control, 27(8), 1459-1502.
*Restuccia, D., & Urrutia, C. (2004). Intergenerational persistence of earnings: The role of early and college education. American Economic Review, 94(5), 1354-1378.

Lecture 3 (Caucutt):
*Caucutt, E., Lochner, L. & Park, Y. (2017), “Correlation, Consumption, Confusion, or Constraints: Why Poor Children Perform so Poorly?” Scandinavian Journal of Economics 119(1), 102-147.
*Caucutt, E. & Lochner, L. (2020), “Early and Late Human Capital Investments, Borrowing Constraints, and the Family”, Journal of Political Economy 128(3), 1065-1147.

Lecture 4 (Lochner):
*Lochner, L. & Monge-Naranjo, A. (2016). “Student Loans and Repayment: Theory, Evidence and Policy”, in E. Hanushek, S. Machin, and L. Woessmann (eds.), Handbook of the Economics of Education, Vol. 5, Chapter 8, Amsterdam: Elsevier Science.

Lecture 5 (Lochner):
*Gervais, M., Liu, Q. & Lochner, L. (2023). “The Insurance Implications of Government Student Loan Repayment Schemes”, AEA Papers and Proceedings 113, 535-540.

*Lochner, L., Liu, Q. & Gervais, M. (2021). “Innis Lecture: Return on Student Loans in Canada”, Canadian Journal of Economics 54(4), 1495-1524.
Lochner, L., Stinebrickner, T. & Suleymanoglu, U. (2021) “Parental Support, Savings and Student Loan Repayment,” American Economic Journal – Policy 13(1), 329-371.
Yannelis, C. (2020). “Strategic Default on Student Loans”, Working Paper.
Mueller, H. & Yannelis, C. (2019). “Increasing Enrollment in Income-Driven Student Loan Repayment Plans: Evidence from the Navient Field Experiment”, Journal of Finance, 77(1), 367-402.
Herbst, D. & Hendren, N. (2021). “Opportunity Unraveled: Private Information and the Missing Markets for Financing Human Capital”, American Economic Review 114(7): 2024—2072.
  ENROL FOR THIS COURSE