Parental Credit Constraints and Child College Attendance

2019 ◽  
Vol 14 (4) ◽  
pp. 548-571
Author(s):  
Daniel Ringo
Keyword(s):  
Student Loans ◽  
Credit Constraints ◽  
The United States ◽  
College Attendance ◽  
Personality Characteristics ◽  
Home Equity ◽  
Access To Credit ◽  
Unsecured Debt ◽  
Unobserved Ability ◽  
Credit Scores

Parents in the United States frequently supplement the student loans available to their children by cosigning on a loan, borrowing against their home equity, or with unsecured debt in their own names. This paper investigates whether some students are constrained from attending and completing college by their parents’ lack of access to credit markets by linking individual parental credit scores to their children's educational attainment. I find that good parental credit significantly improves the child's probability of attending college. Suggestive evidence is provided that the estimated relationship may be causal and not biased by omitted factors, such as unobserved ability or other personality characteristics.

scholarly journals Leverage and Deepening Business-Cycle Skewness

2020 ◽  
Vol 12 (1) ◽  
pp. 245-281 ◽  
Author(s):  
Henrik Jensen ◽  
Ivan Petrella ◽  
Søren Hove Ravn ◽  
Emiliano Santoro
Keyword(s):  
United States ◽  
Business Cycle ◽  
Equilibrium Model ◽  
Financial Constraints ◽  
Credit Constraints ◽  
The United States ◽  
Cycle Asymmetry ◽  
Access To Credit ◽  
Dynamic General Equilibrium Model ◽  
The Face

We document that the United States and other G7 economies have been characterized by an increasingly negative business-cycle asymmetry over the last three decades. This finding can be explained by the concurrent increase in the financial leverage of households and firms. To support this view, we devise and estimate a dynamic general equilibrium model with collateralized borrowing and occasionally binding credit constraints. Improved access to credit increases the likelihood that financial constraints become nonbinding in the face of expansionary shocks, allowing agents to freely substitute inter-temporally. Contractionary shocks, however, are further amplified by drops in collateral values, since constraints remain binding. As a result, booms become progressively smoother and more prolonged than busts. Finally, in line with recent empirical evidence, financially driven expansions lead to deeper contractions, as compared with equally sized nonfinancial expansions. (JEL D14, E23, E32, E44)

scholarly journals Moving to a Job: The Role of Home Equity, Debt, and Access to Credit

2017 ◽  
Vol 9 (2) ◽  
pp. 149-181 ◽  
Author(s):  
Yuliya Demyanyk ◽  
Dmytro Hryshko ◽  
María Jose Luengo-Prado ◽  
Bent E. Sørensen
Keyword(s):  
Labor Markets ◽  
Great Recession ◽  
The United States ◽  
Home Equity ◽  
Access To Credit ◽  
Individual Level ◽  
The Great Recession ◽  
Significant Barrier ◽  
Out Of Area

We use individual-level credit reports merged with loan-level mortgage data to estimate how home equity interacted with mobility in relatively weak and strong labor markets in the United States during the Great Recession. We construct a dynamic model of housing, consumption, employment, and relocation, which provides a structural interpretation of our empirical results and allows us to explore the role that foreclosure played in labor mobility. We find that negative home equity is not a significant barrier to job-related mobility because the benefits of accepting an out-of-area job outweigh the costs of moving. This pattern holds even if homeowners are not able to default on their mortgages. (JEL D14, G01, J61, R23, R31)

scholarly journals Off-farm Income, Credit Constraints, and Farm Investment

2020 ◽  
Vol 52 (4) ◽  
pp. 642-663
Author(s):  
Nigel Key
Keyword(s):  
Household Income ◽  
Credit Constraints ◽  
Limited Resource ◽  
Capital Expenditures ◽  
Farm Income ◽  
Farm Labor ◽  
Federal Programs ◽  
Net Worth ◽  
Access To Credit ◽  
Farm Investment

AbstractMany farmers face borrowing limits that depend on their household income and net worth. Given such credit constraints, an increase in off-farm income should allow farmers to borrow more, thus influencing production decisions and productivity. To test this hypothesis, the education level of the farm operator’s spouse is used to identify exogenous variation in off-farm income. Findings indicate that higher off-farm income leads to more borrowing, capital expenditures, capital input intensity, farm labor use, output, farm income, and productivity. Results suggest that Federal programs that promote access to credit for limited-resource farmers may increase farm investment and productivity.

Student loan debt and first-time home buying in USA

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Robert H. Scott III ◽  
Steven Bloom
Keyword(s):  
College Graduates ◽  
Student Loans ◽  
Student Loan ◽  
Home Equity ◽  
Student Loan Debt ◽  
Content Type ◽  
Loan Debt ◽  
The Usa ◽  
First Time ◽  
Home Buying

Purpose This paper aims to examine the relationship between student loan debt and first-time home buying among college graduates aged 23 to 40 years old in the USA. Design/methodology/approach The authors use the Federal Reserve’s 2019 Survey of Consumer Finances data on American households to present descriptive statistics and run logistic regressions that measure the effects of student loan debt on first-time home buying. The authors also present original survey data of mortgage lenders that provides an industry-level perspective. Findings The authors find that having student loan debt does not by itself prohibit first-time home buyers. On the contrary, having student loan debt increases the likelihood of homeownership by 15.1%. People with student loan debt, however, buy homes that are 39.2% less expensive and have 58% less home equity compared to first-time home buyers without student loans. In addition, it is found that the amount of student loan debt is important. People with student loan debt above the median amount among people with student loan debt ($35,000) are 27% less likely to be first-time home buyers. Practical implications This paper provides public policy analysts and other researchers a different perspective on the correlation between student loan debt and home buying. This study focuses narrowly on first-time home buyers who are college graduates between 23 and 40 years. Thus, capturing the youngest cohort of first-time home buyers and examine the primary factors that influence their home buying decisions. Originality/value First-time homebuyers are historically the largest segment of home buyers making them an important subcategory to study. The rise in student loan debt is posited to explain declining homeownership among younger people. The current literature on student loan debt and home buying often studies samples that are too heterogeneous resulting in mixed findings. This paper adds to the existing literature by filtering the sample to study the effects of student loan debt and first-time home buying among people with at least a college degree who are between 23 and 40 years.

Why Politicians Are More Tolerant: Selective Recruitment and Socialization Among Political Elites in Britain, Israel, New Zealand and the United States

1993 ◽  
Vol 23 (1) ◽  
pp. 51-76 ◽  
Author(s):  
John L. Sullivan ◽  
Pat Walsh ◽  
Michal Shamir ◽  
David G. Barnum ◽  
James L. Gibson
Keyword(s):  
United States ◽  
New Zealand ◽  
Personal Characteristics ◽  
The United States ◽  
Personality Characteristics ◽  
Political Elites ◽  
Political Tolerance ◽  
Individual Level ◽  
The Public ◽  
Members Of Parliament

In this article, we present data showing that national legislators are more tolerant than the public in Britain, Israel, New Zealand and the United States. Two explanations for this phenomenon are presented and assessed. The first is the selective recruitment of Members of Parliament, Knesset and Congress from among those in the electorate whose demographic, ideological and personality characteristics predispose them to be tolerant. Although this process does operate in all four countries, it is insufficient to explain all of the differences in tolerance between elites and the public in at least three countries. The second explanation relies on a process of explicitly political socialization, leading to differences in tolerance between elites and their public that transcend individual-level, personal characteristics. Relying on our analysis of political tolerance among legislators in the four countries, we suggest how this process of political socialization may be operating.

scholarly journals Attitudes toward Credit and Finances among College Students in Brazil and the United States

2013 ◽  
Vol 1 (1) ◽  
pp. 132 ◽  
Author(s):  
Jill M. Norvilitis ◽  
Wesley Mendes-Da-Silva
Keyword(s):  
United States ◽  
College Students ◽  
Parenting Practices ◽  
Credit Card ◽  
Student Loans ◽  
Credit Cards ◽  
Well Being ◽  
Developed Countries ◽  
The United States ◽  
Delay Of Gratification

Although research on credit card debt in developed countries has identified predictors of debt among<br />college students, it is unknown whether these same predictors apply in emerging markets, such as<br />Brazil. To examine this issue, a total of 1257 college students, 814 from Brazil and 443 from the United<br />States, participated in a study exploring the utility of a theory of planned behavior as a predictor of<br />credit card debtand student loans among college students, as well as perceived financial well-being.<br />Compared to the Brazilian participants, the American sample was more financially self-confident,<br />reported better financial well-being, and was more likely to believe that credit cards are negative.<br />Similar predictors of financial well-being emerged in the samples. Specifically, parenting practices<br />related to money and better self-reported delay of gratification are related to more positive financial<br />attitudes and lower levels of debt. Although the debt to income ratio among card holders was similar,<br />Brazilian students held more credit cards than American students. Greater delay of gratification was<br />related to lower levels of student loans in the United States, but there were no significant predictors of<br />student loans in Brazil.

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