Journal Article

Liquidity constraints and the cyclicality of college enrollment in the United States

Michael S. Christian

in Oxford Economic Papers

Volume 59, issue 1, pages 141-169
Published in print January 2007 | ISSN: 0030-7653
Published online January 2007 | e-ISSN: 1464-3812 | DOI: https://dx.doi.org/10.1093/oep/gpl021
Liquidity constraints and the cyclicality of college enrollment in the United States

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Liquidity constraints have a procyclical influence on college enrollment, as people with limited borrowing power have more trouble affording college during recessions. Consequently, if enrollment is influenced by liquidity constraints, people who are more likely to be constrained may enroll more procyclically. Using Current Population Survey data over 1968–2000, I do not find substantive differences in the cyclicality of enrollment across homeowning and non-homeowning households. However, I find significantly more procyclical enrollment among people in households expected to have lower incomes. These findings offer mixed evidence for the historical influence of liquidity constraints on college enrollment in the United States.

Keywords: JEL classifications: I2; E3

Journal Article.  10904 words.  Illustrated.

Subjects: Economics

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