Field of Study and Financial Problems: How Economics Reduces the Risk of Default

Kristoffer Balle Hvidberg
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Kristoffer Balle Hvidberg: CEBI, University of Copenhagen

No 21-12, CEBI working paper series from University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI)

Abstract: This paper documents how extensive economic education can reduce the risk of getting into financial trouble by comparing people who enter business and economics programs with people who enter other higher education programs. To identify the causal effect, I exploit GPA admission thresholds that quasi-randomize applicants near the thresholds into different higher education programs. I find that admission to an economics program reduces the probability of loan default and delinquency by one half. This large reduction is associated with changes in financial behavior, but it is not associated with differences in the level or stability of people' income.

Keywords: Financial Problems; Education; Regression Discontinuity; Financial Literacy (search for similar items in EconPapers)
JEL-codes: G51 G53 I23 (search for similar items in EconPapers)
Pages: 85
Date: 2023-05-11
New Economics Papers: this item is included in nep-fle and nep-rmg
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kucebi:2112

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