ERIC Number: ED598837
Record Type: Non-Journal
Publication Date: 2019-May
Pages: 40
Abstractor: As Provided
ISBN: N/A
ISSN: N/A
EISSN: N/A
Do Income Contingent Student Loan Programs Distort Earnings? Evidence from the UK. NBER Working Paper No. 25822
Britton, Jack W.; Gruber, Jonathan
National Bureau of Economic Research
Government backed income contingent student loans are an increasingly being used to fund higher education. An income contingent repayment plan acts as an incremental marginal tax on labor earnings, which could cause individuals to distort their work effort. This paper uses an administrative dataset from the UK that links student loan borrowers between 1998 and 2008, to their official tax records between 2001/02 and 2013/14. Using a combination of techniques, including bunching and difference-in-difference methodology, our findings strongly reject the hypothesis that the UK's income-contingent repayment plan distorts labor supply. [The Economic and Social Research Council's (ESRC's) Centre for the Microeconomic Analysis of Public Policy at IFS provided financial support for this work.]
Descriptors: Foreign Countries, Student Loan Programs, Income, Loan Repayment, Student Financial Aid, Educational Finance, Higher Education, Taxes, Wages
National Bureau of Economic Research. 1050 Massachusetts Avenue, Cambridge, MA 02138-5398. Tel: 617-588-0343; Web site: http://www.nber.org
Publication Type: Reports - Research
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: The British Academy; Economic and Social Research Council (United Kingdom)
Authoring Institution: National Bureau of Economic Research
Identifiers - Location: United Kingdom
Grant or Contract Numbers: N/A