Liberty for More: Finance and Educational Opportunities

41 Pages Posted: 24 Aug 2013

See all articles by Ross Levine

Ross Levine

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Yona Rubinstein

London School of Economics & Political Science (LSE) - Department of Management

Multiple version iconThere are 2 versions of this paper

Date Written: August 22, 2013

Abstract

Banking reforms — that reduced interest rates — boosted college enrollment rates among able students from middle class families. We define “able” students as those with learning aptitude scores in the top two-thirds of the U.S. population. We define “middle class” as families in which both parents are not highly-educated (above 12 years of education) and that are neither in the bottom fourth nor in the top 10 percent of the distribution family income in the U.S. Our findings suggest that credit conditions, the ability of an individual to benefit from college, and a family’s financial and educational circumstances combine to shape college decisions. The functioning of the financial system plays a powerful role in shaping the degree to which a child’s educational choices — and hence economic opportunities — are defined by parental income.

Keywords: Bank regulation, Human capital, Educational finance, Inequality

JEL Classification: G21, G28, I22, I24, I28, J24

Suggested Citation

Levine, Ross Eric and Rubinstein, Yona, Liberty for More: Finance and Educational Opportunities (August 22, 2013). Available at SSRN: https://ssrn.com/abstract=2314668 or http://dx.doi.org/10.2139/ssrn.2314668

Ross Eric Levine (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yona Rubinstein

London School of Economics & Political Science (LSE) - Department of Management ( email )

United Kingdom

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