A research project investigating financial, workforce, and geospatial behavior of young adults with student debt

Hysteresis and Student Debt


Sérgio Pinto and Marshall Steinbaum bring together the labor economics literature on hysteresis and ongoing research into shape of the student debt, plotting how the Great Recession drove the crisis of higher education loan debt.

Our research is the first, to our knowledge, to examine the Great Recession and the student debt crisis together at an individual, as opposed to macro, level. With fewer jobs available and a more selective labor market, many young people were funneled into a higher education system already in the process of becoming much more dependent on students and their families paying hefty tuition, as opposed to state support. Those who had entered the system seeking credentials to boost their job prospects then graduated (or didn’t graduate) into a labor market still suffering from stagnant wages and disappearing job opportunities. Credentialization cascaded into higher loan balances as a share of income, rising delinquency, and eventually declining repayment rates.

Read the full piece here.

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