Control jurisdiccional de la no propuesta

Of the 4,229 youths in the whole sample, 1,881 youths took no educational loans. The amount of loans is observed only for those who took a loan in college. Ordinary least squares regression will not yield consistent parameter estimates because the sample is censored I estimate the effect of parental divorce on college students’ indebtedness based on a tobit model.

Suppose each youth has a latent demand for educational loans, denoted by 𝑌∗_,

which is not expressed as borrowing until some threshold, denoted by 𝐿, is passed. We observe 𝑌 only when 𝑌∗ _{> 𝐿. Then the zero loans can be interpreted as a left-censored}

61 The regression of interest is specified as

𝑌_𝑖∗ _{= 𝑋}

𝑖′𝛽 + 𝜀𝑖, 𝑖 = 1, … , 𝑁.

where 𝜀𝑖~𝑁(0, 𝜎2), and 𝑋𝑖 denotes the vector of exogenous and fully observed

regressors including the amount of federal or state or local financial aid received during college, parents’ marital status, whether received financial assistance from biological parents for at least 60 percent of the terms in college, an indicator of ever attended private school, an indicator of ever transferred to another school, gender, race, gross household income, an interaction for gross household income and parents’ marital status, an interaction term of an indicator of whether the youth’s biological parents lived in a post- majority state and parents’ marital status, mother’s education level, an indicator of having more than two siblings and the number of years in college.

The observed variable 𝑌_𝑖 , the amount borrowed through educational loans in college, is related to the latent variable 𝑌_𝑖∗ through the observation rule,

𝑌 = {𝑌∗ 𝑖𝑓 𝑌∗ > 𝐿 𝐿 𝑖𝑓 𝑌∗_{≤ 𝐿}

The tobit model estimation results are reported in Tables 14 and 15. Table 14 reports the results for the whole sample. Table 15 reports the results for the subsample of youths who have received a college degree.

The regression results for the whole sample (Table 14) show that parents’ marital status has a statistically significant effect of college students’ educational debt burden. For youths in families with an average gross income of 58,067 dollars, youths in divorced

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families take, on average, an estimated 2,333 (591+58,067*0.03) dollars more in student loans to attend college than youths from intact families. Parents’ consistent financial contribution to the youths’ college education also significantly affects the amount of loans taken by the youths during college. Youths who receive financial assistance from biological parents for at least 60 percent of the terms in college acquire, on average, an estimated 756 dollars less in student loan debt than those who do not consistently receive financial assistance from biological parents. An award of $1,000 more financial aids is estimated to reduce borrowing by an average of 150 dollars. Attending a private college will result in 1,097 dollars more student debt. Youths with more than two siblings tend to borrow approximately 850 dollars more than youths with less than two siblings. Spending an additional year in college would lead to an additional 763 dollars in student loans. Both the gross household income variable and the income-parental divorce interaction term enter significantly in the regression, which indicates that an additional 1000 dollars in household income in intact families can lessen the youth debt burden upon leaving college by 110 dollars. However, a 1000-dollar increase in the household income in divorced families only lessens the youth debt burden by 80 dollars. I also examine how post-majority child support laws affect the debt burden of youths with divorced parents. Table 14 shows that the interaction term of parental divorce and post-majority states is not statistically significant. For the youths whose parents have divorced before they left college, living in a state that requires child support for college does not seem to lessen the youths’ debt burden, which implies that divorced parents in post-majority states do not

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seem to increase the amount they contributed toward their children’s college expenses as compared to their counterparts in non-post-majority states.

The estimation results for the subsample of degree holders (Table 15) are quite similar to the results for the whole sample except that the magnitude of the coefficients of some variables is much larger in the subsample analysis. For college graduates in families with an average gross income of 58,067 dollars, those in divorced families have 2,923 (1762+58067*0.02) dollars more in student loan debt upon graduation than those from intact families. Youths’ race enters significantly in the regression. Nonwhites have a higher amount of loans upon graduation. As in the case of the whole sample, both the gross household income variable and the interaction term of income and parental divorce enter significantly in the regression, but have opposite signs. A 1000 dollar increase in household income in intact families lessens a college graduate’s debt burden by 130 dollars. However, the same increase in the household income only lessens the debt burden of a college graduate in divorced families by 110 dollars. For the youths whose parents have divorced before they left college, living in a state that requires child support for college does not seem to lessen the youths’ debt burden.

4.6 Conclusion

This chapter has contributed to the literature on the relationship between parental divorce and children’s educational outcomes, going beyond previous research by investigating the effect of parental divorce on college students’ educational indebtedness.

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As the regression models demonstrate, parents’ marital status is a significant determinant of the amount of student loans a college student takes to attend college, taking account of other important factors. For youths in families with an average gross income of 58,067 dollars, youths in divorced families take 2,333 dollars more in student loans to attend college than youths from intact families. The analysis of the subsample of college graduates shows that for college graduates in families with an average gross income of 58,067 dollars, those in divorced families have 2,923 dollars more student loan debt upon graduation than those from intact families. The findings are troubling for college students with divorced parents, especially given the fact that the widening gap between financial aid and college costs forces college students and their parents to shoulder a growing portion of college costs.

In most of the states in U.S., child support stops when the child is 18 years old or graduates from high school. Although an agreement as to how the divorced parents should contribute to their children's college education expenses can be incorporated into a divorce agreement, in most states the court cannot order this agreement. Up until the first year of the survey (1997), 18 states (post-majority states) had laws that permit courts either to extend child support beyond the age of 18 or to order child support explicitly for college expenses. However, my findings suggest that post-majority child-support laws may not be bringing about the desired effect. Among children from divorced families, those whose biological parents lived in post-majority states are not taking less loans than

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those whose biological parents lived in non-post-majority states. The results suggest that the implementation of the post-majority child-support laws need to be evaluated.

66 Variable

Marginal

Effect S.E

Parents divorced* 591.20 341.73

Financial support from parents* -756.45 434.89 Financial Aid

(Federal/State/Local)*** -0.15 0.01

Ever Attended Private School*** 1096.93 84.50 Ever Transferred to Other

Schools* 689.37 372.63

Female 876.92 584.62

Gross Household Income * -0.11 0.06

Income × Parents Divorced* 0.03 0.017

Post-majority State × Parents

Divorced 654.38 436.25

Mother’s education 689.71 422.12

Non-White 74.17 374.94

#Sibs>=2*** 849.78 307.89

Number of Years in College*** 763.45 258.76 Note: *Significant at 10 percent significance level; **Significant at 5 percent

significance level; ***Significant at 1 percent significance level. Table 14. Tobit Model Estimation for the Whole Sample

67 Variable (N=2517)

Marginal

Effect S.E

Parents divorced*** 1762.12 598.15

Financial support from parents* -835.65 456.64 Financial Aid (Federal

/State/Local)*** -0.12 0.02

Ever Attended Private School*** 1096.93 84.50 Ever Transferred to Other

Schools* 792.36 428.30

Female 829.87 560.43

Gross Household Income * -0.13 0.07

Income × Parents Divorced* 0.02 0.012

Post-majority State × Parents

Divorced 459.85 307.53

Mother’s education 1024.36 731.69

Non-White*** 2410.15 595.71

#Sibs>=2*** 956.87 341.74

Number of Years in College*** 783.54 265.61 Note: *Significant at 10 percent significance level; **Significant at 5 percent

significance level; ***Significant at 1 percent significance level. Table 15. Tobit Model Estimation for Youths Received College Degrees

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CHAPTER 5: AN EMPIRICAL INVESTIGATION OF STUDENT LOAN DEBT