Labour & Public Policy Seminar: Kristoffer Balle Hvidberg, KU

Title: Field of Study and Financial Problems: How Economics Reduces the Risk of Default

Info about event


Friday 2 September 2022,  at 12:15 - 13:15


Fuglesangs Allé 4, 8210 Aarhus V, Building 2632(L), Room 242

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 and delinquency by one half. This large reduction is associated with changes in financial behavior, but it is not associated with differences in the level or stability of people's income.