College tuition and household savings and consumption

Abstract Despite the high cost of college, there has been little study of the adequacy of household savings and other resources available to fund college. To gauge their adequacy this paper examines households’ standard of living as they pay for college. Using the Consumer Expenditure Survey, the main finding is that households appear to do a relatively good job smoothing their consumption into the academic year, despite large expenses. This is consistent with the Life-Cycle Theory of saving and consumption. There is some evidence of a delayed decline in consumption, and of a decline for households with children first beginning college, but the magnitudes of these declines are rather small.

• Publication year

  2000

• Venue

  Journal of Public Economics

• Publication date

  2000-08-01

• Fields of study

  Economics

• Identifiers
  DOI 10.1016/S0047-2727(99)00068-7
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• The Affordability of Public Higher Education: 1970–90

  2017cited by this paper
• Consumer response to the Reagan tax cuts

  2002cited by this paper
• The Response of Household Consumption to Income Tax Refunds

  1999cited by this paper
• The Reaction of Household Consumption to Predictable Changes in Social Security Taxes

  1999cited by this paper
• SAVINGS INCENTIVES FOR HIGHER EDUCATION

  1998cited by this paper
• Can Families Smooth Variable Earnings

  1997cited by this paper
• The Reaction of Household Consumption to Predictable Changes in Payroll Tax Rates

  1997cited by this paper
• College financial aid and family saving

  1997cited by this paper
• Consumption, Down Payments, and Liquidity Constraints

  1996cited by this paper
• Permanent Income, Current Income, and Consumption: Evidence From Two Panel Data Sets

  1996cited by this paper
• Household Saving: Micro Theories and Micro Facts

  1996cited by this paper
• Is Consumption Growth Consistent with Intertemporal Optimization? Evidence from the Consumer Expenditure Survey

  1995cited by this paper
• The Implicit Taxes from College Financial Aid

  1995influential reference
• Union contracts and the life-cycle/permanent-income hypothesis

  1995cited by this paper
• College Entry by Blacks since 1970: The Role of College Costs, Family Background, and the Returns to Education

  1994cited by this paper
• Intergenerational Transfers and the Accumulation of Wealth

  1994cited by this paper
• Digest of Education Statistics

  1994cited by this paper
• The Consumption Smoothing Benefits of Unemployment Insurance

  1994cited by this paper
• Is College Financial Aid Equitable and Efficient

  1993cited by this paper
• The Affordability of Public Higher Education.

  1993cited by this paper
• Keeping College Affordable. Government and Educational Opportunity.

  1993cited by this paper
• Parental Financial Support for Undergraduate Education. National Postsecondary Student Aid Study, Research and Development Report. Contractor Report.

  1992cited by this paper
• Keeping College Affordable: Government and Educational Opportunity

  1992cited by this paper
• Financing of College Education by Minority and White Families

  1992cited by this paper
• College Scholarship Rules and Private Saving

  1992cited by this paper
• National Saving and Economic Performance

  1991cited by this paper
• A Simple Test of Consumption Insurance

  1991cited by this paper
• Consumption and Liquidity Constraints: An Empirical Investigation

  1989cited by this paper
• Consumption Growth Parallels Income Growth: Some New Evidence

  1989cited by this paper
• The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth

  1988cited by this paper
• Does Need-Based Student Aid Discourage Saving for College?.

  1986cited by this paper
• How Low-Income Families Pay for College.

  1985cited by this paper
• How Middle-Income Families Pay for College.

  1985cited by this paper

• How Much Can Families Afford to Pay for College?

  2025cites this paper
• Income Variation and Excess Sensitivity of Goods-Intensive Leisure

  2022cites this paper
• A bigger house at the cost of an empty stomach? The effect of households’ indebtedness on their consumption: micro-evidence using Belgian HFCS data

  2022cites this paper
• Intertemporal preference with loss aversion: Consumption and risk-attitude

  2021cites this paper
• Asymmetric Consumption Smoothing

  2021cites this paper
• The Insurance Value of Financial Aid

  2021cites this paper
• An Intertemporal Preference with Risk and Loss Aversion

  2020cites this paper
• Charles A. Dice Center for Research in Financial Economics Asymmetric Consumption Smoothing

  2020cites this paper
• Supporting Seniors: How Low-Income Elderly Individuals Respond to a Retirement Support Program

  2020cites this paper
• Thy Neighbor’s Misfortune: Peer Effect on Consumption

  2020cites this paper
• The Economic Impact of Education Spending: Evidence from Self-Employed Households

  2020cites this paper
• Consumer Spending during Unemployment: Positive and Normative Implications

  2019cites this paper
• Liquidity Constraints and Consumption: Evidence from Macro-Prudential Policy in Turkey

  2019cites this paper
• Are Asian Households in the U.S. More Likely than Other Households to Help Children with College Costs?

  2019cites this paper
• Are Asian Households in the U.S. More Likely than Other Households to Help Children with College Costs?

  2019influential citation
• Liquidity Constraints of the Middle Class

  2019cites this paper
• A Study on the Reaction of Households' Entertainment Consumption Due to the Path Act

  2019cites this paper
• A day late and a dollar short: liquidity and household formation among student borrowers

  2018cites this paper
• Asymmetric Consumption Response of Households to Positive and Negative Anticipated Cash Flows

  2018cites this paper
• The Impact of Raising Children on Retirement Security

  2017cites this paper
• Consumption Responses to Temporary Tax Incentives: Evidence from State Sales Tax Holidays

  2017cites this paper
• Why Don't Households Smooth Consumption? Evidence from a 25 Million Dollar Experiment

  2017cites this paper
• Tax Differential and Cross-Border Shopping: Evidence from Singapore

  2017cites this paper
• College tuition payment and household consumption in Japan

  2017cites this paper
• Access to Home Equity and Consumption: Evidence from a Policy Experiment

  2017cites this paper
• Student Loans and Their Effect on Parental Views of Education Financing

  2017cites this paper
• The Invisible Hand of Rain in Spending: Effect of Rainfall-Driven Agricultural Income on Per Capita Expenditure in Ghana

  2017cites this paper
• Consumer Loan Response to Permanent Labor Income Shocks: Evidence from a Major Minimum Wage Increase

  2017cites this paper
• Strategic Default on Student Loans∗

  2016influential citation
• Chapter 12 - Natural Experiments in Macroeconomics

  2016cites this paper
• Parents’ Saving Behaviors on Children’s Potential College Expenses

  2016cites this paper
• NBER WORKING PAPER SERIES THE SOCIAL COST OF NEAR-RATIONAL INVESTMENT

  2016influential citation
• Permanent Income and Subjective Well-Being

  2016cites this paper
• Essays on Household Finance: Income, Consumption, Debt, and Financial Delinquency

  2016cites this paper
• The Social Cost of Near-Rational Investment

  2016influential citation
• Natural Experiments in Macroeconomics

  2015cites this paper
• The Budget Contraction Effect: How Contracting Budgets Lead to Less Varied Choice

  2015cites this paper
• Income Changes and Consumption: Evidence from the 2013 Federal Government Shutdown

  2015cites this paper
• Consumption Response to Credit Tightening Policy: Evidence from Turkey

  2015cites this paper
• Why Don't Households Smooth Consumption? Evidence from a 25 Million Dollar Experiment

  2015cites this paper
• Consumption and Debt Response to Unanticipated Income Shocks: Evidence from a Natural Experiment in Singapore

  2014cites this paper
• The response of household saving to the large shock of German reunification Author :

  2014cites this paper
• College tuition payment and household consumption in Japan

  2014influential citation
• Consumption and Debt Response to Unanticipated Income Shocks: Evidence from a Natural Experiment in Singapore

  2013cites this paper
• Consumer Spending and the Economic Stimulus Payments of 2008

  2013cites this paper
• Consumption and Debt Response to Fiscal Stimuli: Evidence from a Large Panel of Consumers in Singapore

  2013cites this paper
• SAVINGS HABIT AND USE OF SAVINGS AMONG HOUSEHOLDS IN GA-EAST MUNICIPALITY

  2013cites this paper
• Consumption Smoothing after the Final Mortgage Payment: Testing the Magnitude Hypothesis

  2013cites this paper
• Cross-Border Shopping : Do Consumers Respond to Taxes or Prices ?

  2013cites this paper
• The Effectiveness of Training for Displaced Workers with Long Prior Job Tenure

  2012cites this paper
• Liquidity Constraints of the Middle Class

  2012cites this paper
• Spending responses to state sales tax holidays

  2012cites this paper
• Check in the Mail or More in the Paycheck: Does the Effectiveness of Fiscal Stimulus Depend on How it is Delivered?

  2011cites this paper
• Delaying Retirement to Pay for College

  2011cites this paper
• The Effect of Liquid Housing Wealth on College Enrollment

  2011cites this paper
• Why Do Banks Reward Their Customers to Use Their Credit Cards

  2010cites this paper
• Children and Household Utility: Evidence from Kids Flying the Coop

  2010cites this paper
• Credit card use after the final mortgage payment: does the magnitude of income shocks matter?

  2009cites this paper
• DOES THE MAGNITUDE OF INCOME SHOCKS MATTER? 1

  2009cites this paper
• Transaction Costs and Consumption

  2009cites this paper
• Does consumption respond to predicted increases in cash-hand availability?: Evidence from the Italian “severance pay”☆

  2009cites this paper
• The Impact of College Financial Aid Rules on Household Portfolio Choice

  2009cites this paper
• Effects of Predictable Tax Liability Variation on Household Labor Income

  2009cites this paper
• The Consumption Response to Income Changes

  2009cites this paper
• Housing Wealth, Liquidity Constraints, and College Enrollment

  2008cites this paper
• The Consumption Response to Predictable Changes in Discretionary Income: Evidence from the Repayment of Vehicle Loans

  2008cites this paper
• Saving for Children’s College Education: An Empirical Analysis of the Trade-off Between the Quality and Quantity of Children

  2008cites this paper
• The reaction of consumer spending and debt to tax rebates: Evidence from consumer credit data

  2008cites this paper
• The Response of Household Saving to the Large Shock of German Reunification

  2008cites this paper
• College financial aid rules and the allocation of savings

  2008cites this paper
• The Contributions of Economics to the Study of College Access and Success

  2007influential citation
• The Rodney L. White Center for Financial Research The Reaction of Consumer Spending and Debt to Tax Rebates – Evidence from Consumer Credit Data

  2007cites this paper
• The level and composition of consumption over the business cycle: The role of "quasi-fixed" expenditures

  2006cites this paper
• Testing Different Saving Theories Exploiting the Adjustment to a Large Shock

  2006cites this paper
• The Derivatives Sourcebook

  2006cites this paper
• Do Homeowners Increase Consumption after the Last Mortgage Payment? An Alternative Test of the Permanent Income Hypothesis

  2006cites this paper
• National Poverty Center Working Paper Series the Level and Composition of Consumption over the Business Cycle: the Role of " Quasi-fixed " Expenditures

  2005cites this paper
• Adjustment to a Large Shock - Do Households Smooth Low Frequency Consumption?

  2005cites this paper
• CSEM WP 141 D O H OUSEHOLDS S MOOTH S MALL C ONSUMPTION S HOCKS ? E VIDENCE FROM A NTICIPATED AND U NANTICIPATED V ARIATION IN H OME E NERGY C OSTS

  2005cites this paper
• Do Households Smooth Small Consumption Shocks? Evidence from Anticipated and Unanticipated Variation in Home Energy Costs

  2005cites this paper
• Modeling internal commitment mechanisms and self-control: A neuroeconomics approach to consumption-saving decisions

  2005influential citation
• The Measurement of Household Liabilities: Conceptual Issues and Practice

  2005cites this paper
• Modelling Internal Commitment Mechanisms and Self-Control : A Neuroeconomics Approach to Consumption-Saving Decisions

  2004cites this paper
• CONSUMPTION AND CHANGES IN HOME ENERGY COSTS : HOW PREVALENT IS THE ‘ HEAT OR EAT ’ DECISION ?

  2004cites this paper
• Department of Economics Working Paper Series Credit Constraints and Training after Job Loss

  2003cites this paper
• Tax Incentives to Saving and Borrowing

  2003cites this paper
• Consumer response to the Reagan tax cuts

  2002cites this paper
• Tax Incentives for Household Saving and Borrowing

  2002cites this paper