Entrepreneurship and Student Loans: An Analysis of the Association Between Self-Employment and Student Loans

Christopher Wertheim (), Leobardo Diosdado, Sandra DeGrassi, Alexandra Theodossiou and Eugene Bland
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Christopher Wertheim: Department of Accounting, Finance, and Business Law, College of Business, Texas A&M University-Corpus Christi, Corpus Christi, TX 78412, USA
Leobardo Diosdado: Department of Accounting, Finance, and Business Law, College of Business, Texas A&M University-Corpus Christi, Corpus Christi, TX 78412, USA
Sandra DeGrassi: Department of Management and Marketing, College of Business, Texas A&M University-Corpus Christi, Corpus Christi, TX 78412, USA
Alexandra Theodossiou: Department of Accounting, Finance, and Business Law, College of Business, Texas A&M University-Corpus Christi, Corpus Christi, TX 78412, USA
Eugene Bland: Department of Accounting, Finance, and Business Law, College of Business, Texas A&M University-Corpus Christi, Corpus Christi, TX 78412, USA

JRFM, 2025, vol. 18, issue 3, 1-14

Abstract: This study examines the association between self-employment, otherwise known as entrepreneurship, and student loan debt. Based on data from the 2021 National Financial Capability Study, which were analyzed using a multinomial probit model, our results suggest that households that used student loans to finance the education of one household member are more likely to report that the other member of the household pursued self-employment, with everything else remaining equal. This association between student loans and household self-employment is both economically and statistically significant. Our results highlight the importance of alternative forms of financing for entrepreneurship and expand upon existing knowledge about the unintended effects of student loans. Policymakers should consider these results when analyzing the various intended and unintended benefits of policies affecting the availability of student loans.

Keywords: student loans; self-employment; entrepreneurship; household employment (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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