The Nature of Credit Constraints and Human Capital

Lance Lochner and Alexander Monge-Naranjo

American Economic Review, 2011, vol. 101, issue 6, 2487-2529

Abstract: We develop a human capital model with borrowing constraints explicitly derived from government student loan (GSL) programs and private lending under limited commitment. The model helps explain the persistent strong positive correlation between ability and schooling in the United States, as well as the rising importance of family income for college attendance. It also explains the increasing share of undergraduates borrowing the GSL maximum and the rise in student borrowing from private lenders. Our framework offers new insights regarding the interaction of government and private lending, as well as the responsiveness of private credit to economic and policy changes. (JEL D14, H52, I22, I23, J24)

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (140)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.6.2487 (application/pdf)
http://www.aeaweb.org/aer/data/oct2011/20020976_data.zip dataset accompanying article (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: The Nature of Credit Constraints and Human Capital (2010)
Working Paper: The Nature of Credit Constraints and Human Capital (2009)
Working Paper: The Nature of Credit Constraints and Human Capital (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:101:y:2011:i:6:p:2487-2529

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().