Effects of College Educational Debt on Graduate School Attendance and Early Career and Life Choices

28 Pages Posted: 6 Nov 2006 Last revised: 6 Aug 2011

See all articles by Lei Zhang

Lei Zhang

Antai College of Economics and Management, Shanghai Jiao Tong University

Date Written: December 2010

Abstract

This paper examines how college educational debt affects various post-baccalaureate decisions of bachelor’s degree recipients. I employ the Baccalaureate and Beyond 93/97 survey data. Using college aid policies as instrumental variables to correct for the endogeneity of student college debt level, I find that for public college graduates, college debt has a negative and significant effect on graduate school attendance. This negative effect is concentrated on more costly programs associated with doctoral, MBA and first professional degrees, and debt has no effect on the choice of a Master’s program. For private college students, debt does not have an effect on the overall graduate school attendance, but this absence of effect conceals the differential effects of debt on different graduate programs – debt has a positive and significant effect on the choice of an MBA or first professional program and zero effect on other programs. For both public and private college students, debt has no effects on early career choices such as salary and sector of occupation, or marital status and homeownership.

Keywords: college debt, graduate school, early career and lifestyle choices, instrumental variables estimation

JEL Classification: H52, I22, I28

Suggested Citation

Zhang, Lei, Effects of College Educational Debt on Graduate School Attendance and Early Career and Life Choices (December 2010). Available at SSRN: https://ssrn.com/abstract=942793 or http://dx.doi.org/10.2139/ssrn.942793

Lei Zhang (Contact Author)

Antai College of Economics and Management, Shanghai Jiao Tong University ( email )

HOME PAGE: http://sites.google.com/site/zlei89/

Register to save articles to
your library

Register

Paper statistics

Downloads
972
Abstract Views
4,318
rank
22,561
PlumX Metrics