Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/258912 
Year of Publication: 
2019
Series/Report no.: 
CEBI Working Paper Series No. 12/19
Publisher: 
University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI), Copenhagen
Abstract: 
This paper presents new evidence on the effect of education on financial behavior. In particular, I investigate whether obtaining a degree from a study program with a mathematical or economic curriculum affects individuals future loan default probability. I identify the causal effects of different types of education on financial behavior by exploiting the GPA admission thresholds to higher education programs in a fuzzy regression discontinuity design. I compare people who have applied for the same fields of study but who are quasi-randomly allocated to different different fields of study due to small differences in their GPA from upper secondary school. I estimate the effects using a unique combination of administrative data on admissions to post-secondary education and third party reported data on the universe of personal loans. I find that completing a mathematical or economic field of study decreases the probability of default post graduation for the applicants who did not have one of these fields as their most preferred field of study.
Subjects: 
Financial Behavior
Education
Regression Discontinuity
JEL: 
G5
I2
Document Type: 
Working Paper

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