from what I can read in the paper, this is not a causal analysis, but this is a regression analysis - which is useless to estimate this effect in practice unless you control for A LOT of things. IE - poorer people are more likely to have debt.
Student loan debt kills entrepreneurship. Getting 10k in debt versus being debt-free: *Lowers the chance of launching a startup by 7% *Drops the amount of money the startup makes by 42% *Especially hits tech and fast-growing startups *Makes the impact of business failure worsepic.twitter.com/aDB05B1n6c
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I quoted from their initial analysis, but they are later able to get at causality using an exogenous shock. The laws changed to make student debt unable to be discharged through bankruptcy, so they can show that the effect is driven from the debt.
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That makes a lot more sense, thank you.
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I am surprised the chance to launch a startup is decreased by only 7%.I expect that number to be much higher. Anyone graduating with $100k in loans is thinking first and foremost about how to repay them in the safest, fastest way.
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Just wait ‘til you need decent heath insurance ...
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So
@LambdaSchool ends up effectively subsidizing tech entrepreneurship, while colleges tax it.Thanks. Twitter will use this to make your timeline better. UndoUndo
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Laws need to be changed - if you can receive loan support for securing additional education, certainly it would be wise to provide allowances for those starting or maintaining their own business.
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this is how capital wants it, keep the young, ambitious & talented saddled with debt so they cherry pick the best for their incubators or corporations. actual entrepreneurship scares them because it's a threat to their bottom line. we need grants & social wealth funds, not loans.
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