VGSF - WU Vienna - LC

Stephen H. Shore, Georgia State University

Campus WU D3.0.225 11:00 - 12:30

Organizer VGSF

As part of the ser­ies of the "Fin­ance Re­search Sem­inar", VGSF wel­comes Stephen H. Shore from Geor­gia State Uni­versity to present his re­search pa­per.
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How Does Pro­gram of Study Affect Fin­an­cial Out­comes? Re­gres­sion Dis­con­tinu­ity Evid­ence from Den­mark

Au­thors: Stef­fen Ander­sen, Phil­ippe d’Ast­ous, Jimmy Martìnez-­Cor­rea and Stephen H. Shore

Stu­dents who en­roll in some uni­versit­ies and pro­grams of study ex­per­i­ence bet­ter fin­an­cial out­comes than oth­ers. How much of these cross-­pro­gram dif­fer­ences re­flect se­lec­tion versus causal ef­fects? We ex­ploit a dis­con­tinu­ity built into the ad­mis­sions sys­tem at Dan­ish uni­versit­ies, provid­ing quasi-ran­dom assign­ment of sim­ilar ap­plic­ants to dif­fer­ent pro­grams. We then use Dan­ish re­gistry data to com­pare fin­an­cial out­comes 10 years after en­roll­ment in cases where the assign­ment scheme moves stu­dents from pro­grams with worse out­comes to those with bet­ter out­comes, or vice versa. We find that en­rolling in pro­grams with higher­-earn­ing en­rollees causes stu­dents to earn more, but that most cross-­pro­gram dif­fer­ences in earn­ings re­flect se­lec­tion. En­rolling in pro­grams whose en­rollees sub­sequently have high-debt bur­dens (e.g., high non-­mort­gage in­terest pay­ments) causes stu­dents to have higher debt bur­dens them­selves, with much or even all of the cross-­pro­gram dif­fer­ences in debt bur­dens re­flect­ing causal ef­fects and not se­lec­tion. We can­not re­ject the hy­po­thesis that cross-­pro­gram dif­fer­ences in fin­an­cial as­sets, mort­gages, and neigh­bor­hood qual­ity entirely re­flect se­lec­tion and not causal ef­fects.

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