Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional da UNESP |
Texto Completo: | http://dx.doi.org/10.1080/01603477.2022.2134035 http://hdl.handle.net/11449/246088 |
Resumo: | This paper aims to analyze the sustainability of student debt in the US. For this purpose, I build a neo-Kaleckian model in which households can borrow to either consume or invest in human capital. Next, I calibrate the model using US data to simulate the economic effects of specific policies such as student loan forgiveness. To my knowledge, this is the first study that considers household borrowing for two different purposes, consumption and human capital accumulation, in a demand-led macro-modeling framework. The main findings are that (i) household debt is sustainable in the long run (i.e., the debt servicing is compatible with the long-term economic growth) for a consumption level greater than 90% of household income; (ii) new borrowing boosts short-term economic activity while having ambiguous long-term effects because of its outcomes to household indebtedness and debt servicing; and (iii) student loan cancelation has only short-run economic effects, whereas reducing loan interest rates and changing the eligibility criterion for student loan forgiveness result in long-term effects. |
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Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approachCapacity utilizationhousehold debthuman capitalpost-keynesian economicsstudent loansThis paper aims to analyze the sustainability of student debt in the US. For this purpose, I build a neo-Kaleckian model in which households can borrow to either consume or invest in human capital. Next, I calibrate the model using US data to simulate the economic effects of specific policies such as student loan forgiveness. To my knowledge, this is the first study that considers household borrowing for two different purposes, consumption and human capital accumulation, in a demand-led macro-modeling framework. The main findings are that (i) household debt is sustainable in the long run (i.e., the debt servicing is compatible with the long-term economic growth) for a consumption level greater than 90% of household income; (ii) new borrowing boosts short-term economic activity while having ambiguous long-term effects because of its outcomes to household indebtedness and debt servicing; and (iii) student loan cancelation has only short-run economic effects, whereas reducing loan interest rates and changing the eligibility criterion for student loan forgiveness result in long-term effects.Department of Economics São Paulo State University (UNESP)Department of Economics São Paulo State University (UNESP)Universidade Estadual Paulista (UNESP)Serra, Gustavo Pereira [UNESP]2023-07-29T12:31:20Z2023-07-29T12:31:20Z2023-01-01info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article173-206http://dx.doi.org/10.1080/01603477.2022.2134035Journal of Post Keynesian Economics, v. 46, n. 1, p. 173-206, 2023.1557-78210160-3477http://hdl.handle.net/11449/24608810.1080/01603477.2022.21340352-s2.0-85139969844Scopusreponame:Repositório Institucional da UNESPinstname:Universidade Estadual Paulista (UNESP)instacron:UNESPengJournal of Post Keynesian Economicsinfo:eu-repo/semantics/openAccess2023-07-29T12:31:20Zoai:repositorio.unesp.br:11449/246088Repositório InstitucionalPUBhttp://repositorio.unesp.br/oai/requestopendoar:29462024-08-05T21:07:16.520452Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP)false |
dc.title.none.fl_str_mv |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
title |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
spellingShingle |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach Serra, Gustavo Pereira [UNESP] Capacity utilization household debt human capital post-keynesian economics student loans |
title_short |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
title_full |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
title_fullStr |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
title_full_unstemmed |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
title_sort |
Household debt, student loan forgiveness, and human capital investment: a neo-Kaleckian approach |
author |
Serra, Gustavo Pereira [UNESP] |
author_facet |
Serra, Gustavo Pereira [UNESP] |
author_role |
author |
dc.contributor.none.fl_str_mv |
Universidade Estadual Paulista (UNESP) |
dc.contributor.author.fl_str_mv |
Serra, Gustavo Pereira [UNESP] |
dc.subject.por.fl_str_mv |
Capacity utilization household debt human capital post-keynesian economics student loans |
topic |
Capacity utilization household debt human capital post-keynesian economics student loans |
description |
This paper aims to analyze the sustainability of student debt in the US. For this purpose, I build a neo-Kaleckian model in which households can borrow to either consume or invest in human capital. Next, I calibrate the model using US data to simulate the economic effects of specific policies such as student loan forgiveness. To my knowledge, this is the first study that considers household borrowing for two different purposes, consumption and human capital accumulation, in a demand-led macro-modeling framework. The main findings are that (i) household debt is sustainable in the long run (i.e., the debt servicing is compatible with the long-term economic growth) for a consumption level greater than 90% of household income; (ii) new borrowing boosts short-term economic activity while having ambiguous long-term effects because of its outcomes to household indebtedness and debt servicing; and (iii) student loan cancelation has only short-run economic effects, whereas reducing loan interest rates and changing the eligibility criterion for student loan forgiveness result in long-term effects. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-07-29T12:31:20Z 2023-07-29T12:31:20Z 2023-01-01 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://dx.doi.org/10.1080/01603477.2022.2134035 Journal of Post Keynesian Economics, v. 46, n. 1, p. 173-206, 2023. 1557-7821 0160-3477 http://hdl.handle.net/11449/246088 10.1080/01603477.2022.2134035 2-s2.0-85139969844 |
url |
http://dx.doi.org/10.1080/01603477.2022.2134035 http://hdl.handle.net/11449/246088 |
identifier_str_mv |
Journal of Post Keynesian Economics, v. 46, n. 1, p. 173-206, 2023. 1557-7821 0160-3477 10.1080/01603477.2022.2134035 2-s2.0-85139969844 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Journal of Post Keynesian Economics |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
173-206 |
dc.source.none.fl_str_mv |
Scopus reponame:Repositório Institucional da UNESP instname:Universidade Estadual Paulista (UNESP) instacron:UNESP |
instname_str |
Universidade Estadual Paulista (UNESP) |
instacron_str |
UNESP |
institution |
UNESP |
reponame_str |
Repositório Institucional da UNESP |
collection |
Repositório Institucional da UNESP |
repository.name.fl_str_mv |
Repositório Institucional da UNESP - Universidade Estadual Paulista (UNESP) |
repository.mail.fl_str_mv |
|
_version_ |
1808129286904741888 |