Rajashri Chakrabarti

Does Credit Access in College Affect Long-Term Outcomes of Students?

Rajashri Chakrabarti, together with Luis Armona and Michael Lovenheim, has recently examined the effect of attending for-profit postsecondary institutions using administrative data in the United States. The researchers find that students are much more likely to enrol in a for-profit institution for a given labour demand change when there is a higher latent supply of such institutions. For-profit enrolment leads to higher loan amounts, an increased likelihood of borrowing, an increased risk of default and worse labour market outcomes. Results point to low returns to for-profit enrolment that have important implications for public investments in higher education as well as how students make postsecondary choices.

In other research, Raji Chakrabarti has studied the effects of recent declines in state support for higher education on long term financial and economic outcomes of students in the United States. Findings indicate that state appropriation declines during college lead to a higher probability of originating any student loan debt, higher student debt balances, lower credit scores, decreased likelihood of owning a car and a home and decreased consumption.

While visiting CESifo, Ms Chakrabarti will continue to work on the above paper as well as two other projects. The first of these projects investigates the causal effect of student debt on future human capital formation. It finds a negative relationship between the level of undergraduate student debt and graduate school enrolment. The second project examines the effect of postsecondary supply conditions on labour market dynamics using a merger of industry, occupation and administrative education data from the United States.

Ms Chakrabarti’s research focuses on topics in the economics of education and labour economics. Much of her current research studies effects of credit access on future outcomes of students, costs and returns to postsecondary education, inter-linkage between education and labour markets and the link between health and education.

Raji Chakrabarti is a Senior Economist at the Federal Reserve Bank of New York. She is also a Research Affiliate at Harvard University’s Program on Education Policy and Governance, a Fellow at New York University’s Institute for Education and Social Policy and an Affiliate at Columbia University’s Committee on the Economics of Education. She recently served on the Board of Directors and Executive Committee of the New York Census Research Data Center and currently serves on the Board of Directors of the Association for Education Finance and Policy. She is an editorial board member of Education Finance and Policy. Prior to joining the NY Fed, Ms Chakrabarti was a postdoctoral fellow at Harvard University in the John F. Kennedy School of Government. She holds a PhD in Economics from Cornell University.