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Inequality in Higher Education: Student Debt, Social Background, and Labour Market Outcomes

Sat, August 12, 4:30 to 6:10pm, Palais des congrès de Montréal, Level 5, 516C

Abstract

As university tuition rises student debt has become a focal issue in discussions of educational attainment and class mobility. Few prior studies investigate how student debt affects the labour market transition of new post-secondary graduates. Using nationally representative data on new university graduates in Canada (2010), we estimate the effect of student debt on labour market outcomes and test whether this effect is moderated by a student’s socio-economic background. We find that student debt is associated with increased probability of taking temporary work immediately after graduation and an increased number of employers three years after graduation. We also find that the effect of debt is moderated by social background. For those from more advantaged backgrounds, debt is associated with higher income both two and three years after graduation. By contrast, we find that student debt is associated with reduced income for those from lower social backgrounds. The implications of this research are discussed in a cross-national perspective that examines the role policy plays in shaping levels of student debt and how debt affects students from different SES backgrounds.

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