Thursday, December 22, 2011

Viva la revolution!


From the job market paper of Alex Solis:
Does limited access to credit explain some of the gap in schooling attainment between children
from richer and poorer families? I present new evidence on this important question using data
from two loan programs for college students in Chile. Both programs offer loans to students who
score above a threshold on the national college admission test, providing the basis for a regression discontinuity evaluation design. I fi nd that students from relatively poor families who score just above the cutoff have nearly 20 percentage points higher enrollment than students who score just below the cutoff. Access to the loan program effectively eliminates the family-income gradient in enrollment among students with similar test scores. Moreover, access to loans also leads to higher enrollment in the second and third years of college. These findings suggest that differential access to credit is an important factor behind the intergenerational transmission of income in Chile. 
Here also the blog post about the paper.

This is a very welcome contribution in terms of evidence related to the increase in enrollment when credit constrains are relaxed, but we still need to know what are the dynamic effects of the debt burden for these families and, more importantly, the elasticity price of enrollment, given Chilean higher education is the most expensive in the world..... more than credits are needed to fix the problems that unleashed the student's revolution!


No comments:

Post a Comment