The Evidence on Credit Constraints in Post-Secondary Schooling

By Pedro Carneiro, James J. Heckman. Social Science Research Network, 2002

1,212 citations recorded by the source corpus.

This paper examines the family income -- college enrollment relationship and the evidence on credit constraints in post-secondary schooling. We distinguish short-run liquidity constraints from the long-term factors that promote cognitive and noncognitive ability. Long-run factors crystallized in ability are the major determinants of the family income -- schooling relationship, although there is some evidence that up to 8% of the U.S. population is credit constrained in a short-run sense. Evidence that IV estimates of the returns to schooling exceed OLS estimates is sometimes claimed to support the existence of substantial credit constraints. This argument is critically examined.

Subfields: Accounting, Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/132af26e2ff1eec8ae4f568334e91d9858627bc0

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Sociology and Political Science

Citations in the corpus

Educational inequality: the widening socio-economic gap (2005, background): “In fact, there is US evidence that longer-term family background factors influence children’s educational attainment more than short-term credit constraints ( Carneiro and Heckman, 2003; 7 Cameron and Heckman, 2001).”
What Linear Estimators Miss: The Effects of Family Income on Child Outcomes (2011, methodology): “Taking a slightly different approach, Carneiro and Heckman (2002) estimate the effects of income at different child ages on subsequent college enrollment and math test scores, controlling for permanent income.”
Income Contingent Loans for Higher Education: International Reforms (2006, background): “As examples, see Greenaway and Haynes (2003) for the UK, Carneiro and Heckman (2002) for the US, Chapman (1997) for Australia and Finnie and Schwartz (1997) for Canada. distribute tax resources to individuals who as children are from privileged backgrounds and who as adults receive high individual e”
The Nature of Credit Constraints and Human Capital. NBER Working Paper No. 13912. (2008, neutral): “ Carneiro and Heckman (2002) also estimate small difierences in college enrollment rates”
Why Are Youth from Lower-income Families Less Likely to Attend University? Evidence from Academic Abilities, Parental Influences, and Financial Constraints (2007, background): “Carneiro and Heckman (2002) challenge this view on the basis of three arguments.”
Using Heteroscedasticity to Identify and Estimate Mismeasured and Endogenous Regressor Models (2012, methodology): “Access measures may be independent of unobserved ability (though see Carneiro and Heckman 2002) and may affect the schooling decision.”
Investing in Our Young People (2010, positive): “Recent research summarized in Carneiro & Heckman (2002, 2003) and in CHLM demonstrates the quantitative insignificance of family credit constraints in the child’s college-going years in explaining a child’s enrollment in college.”
Inequality of opportunity in the land of opportunities, 1968–2001 (2009, background): “On American data, Carneiro and Heckman [11] and Cameron and Taber [10] reject this hypothesis.”
Credit Constraints in Education (2011, neutral): “noted by Carneiro and Heckman (2002), this prediction contrasts sharply with the prediction above that the marginal wage return to investment is higher for constrained youth.”
Social Stratification in Higher Education (2009, background): “…postsecondary careers (Card, 2001), others have found that much of the association can be accounted for by the contribution of permanent family income to adolescent academic achievement (Carneiro & Heckman, 2002) or to the likelihood that students enjoy school (Stinebrickner & Stinebrickner, 2003).”
Children’s educational attainment and the aspirations, attitudes and behaviours of parents and children through childhood (2011, background): “Given that it seems unlikely that all families will be able to borrow against future earnings, poorer families may well not be able to invest optimal amounts (for more information on credit constraints see Carneiro and Heckman 2002).”
Tuition fees and the demand for university places (2009, background): “Carneiro and Heckman (2002), among others, have argued that there is little evidence of important credit constraints affecting post-secondary enrollments, which would allay concerns of adverse distributional consequences from increasing fees.”
The Effect of Credit Constraints on the College Drop-Out Decision A Direct Approach Using a New Panel Study (2008, neutral): “Differences between the expectations in equation (2) and the expectations in equation (1) primarily reflect learning that has taken place since a student enters school (Manski (1989), Altonji (1993), Carneiro et al. (2005), Cunha et al.”