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Events of Department of Economics

May 20, 2021 at 17:05 - 18:20
Webinar

Seminar (Joint with the BAFFI CAREFIN)

Macroeconomics - Joint with CREI-UPF

Debt, Human Capital Accumulation, and the Allocation of Talent

Arlene Wong (Princeton University)

Abstract

We evaluate the long-run labor market consequences of increasing student debt. Exploiting variation in the composition of college funding, we find that larger student debt burdens lead to higher initial earnings but lower subsequent returns to experience. Initial occupational choice out of college plays an important role in driving these results. We rationalize the empirical findings in a dynamic heterogeneous agent lifecycle model with endogenous schooling, occupational choice, and credit market imperfections. The model highlights the distortions to human capital and misallocation of talent that can arise from credit constraints. 

by invitation: for information or to receive the invitation link contact patrizia.pellizzari@unibocconi.it