The Evidence on Credit Constraints in Post-Secondary Schooling [report]

Pedro Carneiro, James Heckman
2002 unpublished
The Evidence on Credit Constraints in Post-Secondary Schooling * 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.
more » ... ulation 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.
doi:10.3386/w9055 fatcat:64ccnr3e6rfu3mojhou3wz2s4a