NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Liberty for More: Finance and Educational Opportunities

Ross Levine, Yona Rubinstein

NBER Working Paper No. 19380
Issued in August 2013
NBER Program(s):   CF      LS

Banking reforms—that reduced interest rates—boosted college enrollment rates among able students from middle class families. We define “able” students as those with learning aptitude scores in the top two-thirds of the U.S. population. We define “middle class” as families in which both parents are not highly-educated (above 12 years of education) and that are neither in the bottom fourth nor in the top 10 percent of the distribution family income in the U.S. Our findings suggest that credit conditions, the ability of an individual to benefit from college, and a family’s financial and educational circumstances combine to shape college decisions. The functioning of the financial system plays a powerful role in shaping the degree to which a child’s educational choices—and hence economic opportunities—are defined by parental income.

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This paper was revised on October 10, 2013

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Document Object Identifier (DOI): 10.3386/w19380

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