September 23, 2020
Cameron Ballard-Rosa (North Carolina, Chapel Hill)
The Albatross of Education: Personal Student Debt and Preferences for Redistribution
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ABSTRACT
Human capital plays a central role in the formation of political preferences. While much prior work has focused primarily on the labor market benefits going to college provides, the past two decades have witnessed a radical surge in the costs associated with attending university. For many individuals, these costs have been affordable only by resorting to massive student loans. Despite now constituting the largest source of non-mortgage individual debt in the US, there is little extant work studying the individual political consequences of this explosion of student debt. This paper presents a new theory highlighting two critical theoretical differences between student loans and other forms of personal debt: the non-tangibility of human capital, combined with the difficulty of expunging education debt in default, means that individuals are much more likely to view such loans as a burden during periods of unemployment or low earnings, thereby increasing demands for government labor market protection programs. In a series of original national surveys, I demonstrate a strong association between individual student loans and demand for government protection, even after controlling for a host of potential alternative accounts and across a range of estimation approaches. Importantly, I also demonstrate that student debt is different from other forms of private debt. For forms of personal credit not subject to the issues that arise from acquisition of intangible assets, I do not find a similar association with demands for redistribution. These insights suggest that the straightforward expectations of the materialist effects of higher education may be ruptured for the current and coming generations.