Two Recent Studies, Children of Incarcerated Parents and the Long Run Effects of Student Debt

Amid the blooming flowers of May, each year sees the arrival of the Papers and Proceedings volume of the American Economic Review, containing short and sometimes punchy gleanings from the previous ASSA meetings.  Here are two abstracts of interest.  I haven’t gone through the papers themselves, so I can’t vouch for their methodologies, but the results they claim to have found are politically important.

Title: Student Debt and Labor Market Outcomes
Authors: Gerald Eric Daniels Jr. and Andria Smythe

We study the impact of student debt on various labor market outcomes, namely, income, hourly wages, and hours worked. Using the NLSY97 and a difference-in-difference approach, we find statistically significant differences in labor market outcomes for individuals who received a student loan versus those who received no student loan. We find that the difference in post- versus pre-college income is 8-9 percent higher for individuals that received a student loan relative to individuals who received no student loan. Further, we find evidence that this higher income is due to higher work hours.

Title: The Child Left Behind: Parental Incarceration and Adult Human Capital in the United States
Author: Laura E. Henkhaus

Exposure to parental incarceration is particularly prevalent in the United States, where about 7 percent of children have lived with a parent who was incarcerated. In this paper, I use nationally representative US data and apply partial identification methods to bound the likely effects of parental incarceration on education and labor market outcomes. Findings suggest that parental incarceration leads to substantially higher rates of high school dropout. Results provide some support for negative effects on likelihood of college degree attainment and employment in young adulthood. This work has important implications for criminal justice policy and social policies toward children.