Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259813 
Year of Publication: 
2021
Series/Report no.: 
CEBI Working Paper Series No. 12/21
Publisher: 
University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI), Copenhagen
Abstract: 
This paper documents how extensive economic education can reduce the risk of getting into financial problems by comparing people who enter business and economics programs with people who enter other higher education programs. To identify the causal effect, I exploit GPA admission thresholds that quasi-randomize applicants near the thresholds into different programs. I find that admission to an economics education significantly reduces the probability of loan default by onehalf. This large reduction in the default probability is associated with changes in financial behavior, but it is not associated with differences in the level or stability of people's income.
Subjects: 
Financial Problems
Education
Regression Discontinuity
Financial Literacy
JEL: 
G51
G53
I23
Document Type: 
Working Paper

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