The Cost of Financing Education: Can Student Debt Hinder Entrepreneurship?

• 成果类型: Article
• 署名作者: Krishnan, Karthik; Wang, Pinshuo
• 署名单位: Northeastern University; State University System of Florida; University of South Florida
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2995
• 发表日期: 2019
• 页码: 4522-4554
• 关键词: Entrepreneurship; start-up financing; student dept; Student loan; survey of consumer finance

摘要

We find that student debt is negatively related to the propensity to start a firm, particularly larger and more successful ventures. An exogenous change due to the Higher Education Amendments of 1998, which made student debt completely nondischargeable through personal bankruptcy, reduced the likelihood of entrepreneurship by student loan borrowers that were already in four-year college at the time of this regulation. Moreover, an exogenous shock to the level of student debt due to the Higher Education Amendments of 1992 negatively impacts entrepreneurship rates for students already in four-year college at the time of this regulation. Entrepreneurs with more student debt are more likely to fall behind on their student debt payments, and this relation is mitigated when their ventures are successful. Our evidence indicates that student debt inhibits entrepreneurship by exacerbating the effect of negative business outcomes on the individual.