Effect of Student Loans on Income Inequality in the United States

Ahmed, A., & Kabir, M. A. (2019). Effect of Student Loans on Income Inequality in the United States. The Journal of Applied Business and Economics, 21(8), 11-24.

14 Pages Posted: 20 May 2021

See all articles by Ashraf Ahmed

Ashraf Ahmed

Keyano College

M. Adnan Kabir

University of Liberal Arts Bangladesh

Date Written: August 17, 2019

Abstract

Student loan is a pervasive problem in the United States. Historically, higher education has been a major driver of intergenerational mobility in the United States. The current student loan has increased substantially over the years, surpassing credit card and auto loans. Using panel data from all States, this paper attempts to empirically predict if income inequality is affected by student loans. Statistical analysis points towards student loan exacerbating income inequality. Other variables such as private college tuition and household poverty have a highly significant negative effect on income inequality. The overall results suggest that increased access to higher education at the expense of higher student loans may be countervailing to the income distribution dynamics of the United States.

Keywords: Student loans, Income Inequality, Fixed Effect, United States

JEL Classification: I24, I26, G00

Suggested Citation

Ahmed, Ashraf and Kabir, M. Adnan, Effect of Student Loans on Income Inequality in the United States (August 17, 2019). Ahmed, A., & Kabir, M. A. (2019). Effect of Student Loans on Income Inequality in the United States. The Journal of Applied Business and Economics, 21(8), 11-24., Available at SSRN: https://ssrn.com/abstract=3848074

Ashraf Ahmed

Keyano College

Canada

M. Adnan Kabir (Contact Author)

University of Liberal Arts Bangladesh ( email )

House No. 56, Road No. 4/A, Satmasjid Rd
Dhaka 1209
dhaka, 1209
Bangladesh

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