This paper examines the influence of psychological responses to debt
on career choices from an experiment in which alternative financial
aid packages were assigned by lottery to a set of law school admits.
The packages had equivalent monetary value, but one required the
student to take on a loan that would be paid for by the school if he
worked in public interest law, while the other covered tuition as long
as the student worked in public interest law. If he did not, the student
would be required to reimburse the school. Tuition assistance recipients
have a 36 to 45 percent higher public interest placement rate
and, when lottery results were announced before enrollment, were
twice as likely to enroll. (JEL I21, I22, J44, D14)
"Educational Debt Burden and Career Choice: Evidence from a Financial Aid Experiment at NYU Law School."
American Economic Journal: Applied Economics,
Analysis of Education
Professional Labor Markets; Occupational Licensing