Browsing by Author "Silva, Estefano da Rocha Oliveira da"
Now showing 1 - 1 of 1
Results Per Page
Sort Options
- Delinquency and default in the USA student debt as fractional response to unemployment and average debt per borrowerPublication . Silva, Estefano da Rocha Oliveira da; Fuinhas, José Alberto Serra Ferreira RodriguesStudent debt and default has been a hot topic of research in the last decades, being majority of these studies done in the USA. In this paper we study the response of the proportion of student borrowers with ninety or more days of delinquency or in default to variables such as unemployment and the average debt per borrower, in the United States, using a panel data of 50 states, from 2004 to 2012. The proportion of borrowers with delinquency or default are modeled as fractional responses to unemployment, average debt per borrower, consumer sentiment and financial stress. Therefore, a fractional probit is used as econometric model, which specifies conditional means of state and year unobserved effects, as linear functions of the covariates. The specification tests indicate normality, absence of autocorrelation and homoscedasticity, and supports that no relevant variable was omitted. Unemployment, and the average debt per borrower are statistically significant and contributes to increase the delinquency or default in the USA.