Higher Education and Financial Behavior: The Effect of Studying Mathematics and Economics on Financial Outcomes

CEBI Working Paper 12/21

85 Pages Posted: 3 Dec 2019 Last revised: 12 May 2023

See all articles by Kristoffer Balle Hvidberg

Kristoffer Balle Hvidberg

University of Copenhagen - Department of Economics

Date Written: May 11, 2023

Abstract

This paper documents how extensive economic education can reduce the risk of getting into financial trouble by comparing people who enter business and economics programs with people who enter other higher education programs. To identify the causal effect, I exploit GPA admission thresholds that quasi-randomize applicants near the thresholds into different higher education programs. I find that admission to an economics program reduces the probability of loan default and delinquency by one half. This large reduction is associated with changes in financial behavior, but it is not associated with differences in the level or stability of people’s income.

Keywords: Financial Problems, Education, Regression Discontinuity, Financial Literacy

JEL Classification: G51, G53, I23

Suggested Citation

Hvidberg, Kristoffer Balle, Higher Education and Financial Behavior: The Effect of Studying Mathematics and Economics on Financial Outcomes (May 11, 2023). CEBI Working Paper 12/21, Available at SSRN: https://ssrn.com/abstract=3487463 or http://dx.doi.org/10.2139/ssrn.3487463

Kristoffer Balle Hvidberg (Contact Author)

University of Copenhagen - Department of Economics

Øster Farimagsgade 5, Bygn 26
Copenhagen, 1353
Denmark

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