Early-life financial behavior, intergenerational transfers, and employment: Insights from a nudge in student loan policy

This paper investigates the effect of student loans on students’ spending, earnings, and parental transfers. For causal identification, we exploit a nudge for the take-up of student loans. We estimate an instrumental variable (IV) model with a first-stage Difference-in-Differences design. We find that a decline in the default student loan reduced monthly student borrowing. A one-euro decline in student loans reduced students’ expenditures by 36 cents, but also led to a substantial increase of parental financial contributions (55 cents) and in-kind transfers (13 cents). Student loans substantially affect consumption behavior. Labor earnings are affected among vocational students, but not among university students.

Netspar, Network for Studies on Pensions, Aging and Retirement, is een denktank en kennisnetwerk. Netspar is gericht op een goed geïnformeerd pensioendebat.

MEER OVER NETSPAR


Missie en strategie           •           Netwerk           •           Organisatie           •          Magazine
Netspar Brief            •            Werkprogramma 2019-2023           •           Onderzoekagenda

OVER NETSPAR

Onze partners

B20160708_tilburg university
B20200214_BlackRock_BLK_eng_black_rgb_small
B20200104_RailOV_logoo.original.grijswaarden
Print
B20190823_mn-logo_small
Bekijk al onze partners