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Author: Ji, Yan
Resulting in 2 citations.
1. Ji, Yan
Essays on the Macroeconomic Implications of Financial Frictions
Ph.D. Dissertation, Department of Economics, Massachusetts Institute of Technology, 2017.
Also: https://dspace.mit.edu/handle/1721.1/111365
Cohort(s): NLSY97
Publisher: Department of Economics, Massachusetts Institute of Technology
Keyword(s): College Enrollment; Debt/Borrowing; Job Search; Labor Market Outcomes; Student Loans

Permission to reprint the abstract has not been received from the publisher.

This thesis consists of three chapters on the macroeconomic implications of financial frictions. The first chapter investigates the implications of student loan debt on labor market outcomes. I begin by analytically demonstrating that individuals under debt tend to search less and end up with lower-paid jobs. I then develop and estimate a quantitative model with college entry, borrowing, and job search using NLSY97 data to evaluate the proposed mechanism under the fixed repayment plan and the income-based repayment plan (IBR). My simulation suggests that the distortion of debt on job search decisions is large under the fixed repayment plan. IBR alleviates this distortion and improves welfare. In general equilibrium, debt alleviation achieved through IBR effectively offers a tuition subsidy that increases college entry and encourages firms to post more jobs, further improving welfare.
Bibliography Citation
Ji, Yan. Essays on the Macroeconomic Implications of Financial Frictions. Ph.D. Dissertation, Department of Economics, Massachusetts Institute of Technology, 2017..
2. Ji, Yan
Job Search under Debt: Aggregate Implications of Student Loans
Journal of Monetary Economics published online (11 May 2020): DOI: 10.1016/j.jmoneco.2020.05.002.
Also: https://www.sciencedirect.com/science/article/pii/S0304393220300672
Cohort(s): NLSY97
Publisher: Elsevier
Keyword(s): Debt/Borrowing; Job Search; Student Loans

A dynamic equilibrium model of schooling, borrowing, and job search is developed to quantify the aggregate implications of student loans. In my model, risk-averse agents under debt tend to search less and end up with lower-paid jobs. Calibrating the model using micro data, I show that student loans have significant effects on borrowers' job search decisions under the fixed repayment plan. The income-based repayment plan (IBR) largely alleviates the burden of debt repayment by insuring labor market outcomes, allowing borrowers to conduct a more adequate job search. In general equilibrium, IBR also increases social welfare by encouraging college attendance.
Bibliography Citation
Ji, Yan. "Job Search under Debt: Aggregate Implications of Student Loans." Journal of Monetary Economics published online (11 May 2020): DOI: 10.1016/j.jmoneco.2020.05.002.