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Labor Market Returns to Student Loans for University: Evidence from Chile

Year: 2019

Type: article

Abstract: We study the labor market returns to a state-guaranteed loan used to finance university degrees in Chile. Using a regression discontinuity design, we show that marginally eligible students forgo vocational education in favor of university education but reduce their probability of graduation. Even though university loan takers accumulate more student debt, their labor market outcomes are not different from those of ineligible students. We find suggestive evidence that the lower quality of the receiving institutions accounts for these results. Finally, we extrapolate the effects away from the eligibility cutoff and show that supramarginal students benefit from this policy.

Source: Journal of Labor Economics

DOI: 10.1086/706486

Authors: Alonso Bucarey, Dante Contreras, Pablo Muñoz

Institutions: University of Chile, Escola Brasileira de Economia e Finanças

Language: English

Topic: Higher Education Research Studies

Subfield: Education

Field: Social Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities, Quality education, No poverty

Open Access status: green

OpenAlex ID: W2976605785

FWCI: 8.209

Cites: 43

Cited by: 32

Related to: 10