Patience and Credit Constraints in Education

Vandenbroucke, Guillaume

doi:10.20955/r.2026.09

Journal Article

Patience and Credit Constraints in Education

Abstract: The role of ability (a cognitive trait) and patience (a non-cognitive trait) for life outcomes, such as education, is well documented. Similarly, the impact of credit constraints on education decisions is the subject of a vast literature. I take stock of these strands of the literature and ask: how do patience and ability interact with a credit constraint in determining college attainment? I analyze a stylized model of the college decision where individuals are differentiated by their ability and their patience, which is represented by their discount factor. I introduce two different features in the model: either a non-pecuniary cost of college (under the assumption of a perfect credit market) or an exogenous credit constraint (without a non-pecuniary cost). I show that each feature can rationalize, on its own, the observation that the most patient individuals are the most likely to achieve a college education. The exogenous credit constraint, however, has a counterfactual implication. I conclude that the non-pecuniary cost of college is the most likely reason for the role of patience in educational attainment.

JEL Classification: E6; I2; J62;

https://doi.org/10.20955/r.2026.09