| The purpose of this quantitative research with a correlational design was to determine whether a relationship exists between the increase in federal student loan funding and the increase in wage inequality among college-educated workers in the United States after controlling for wage differences among occupations and labor force composition. Based upon Mincer's model of human capital accumulation, the skill biased technological change model, and studies showing tuition incentives provide a disincentive to student effort and reduce human capital accumulation in college, this study explored whether federal student loan funding behaved as a tuition subsidy in this model. Two research questions guided this study: 1) Is there a significant relationship between federal student loan funding and wage inequality among college-educated workers? 2) Is there a significant relationship between federal student loan funding and wage inequality among college-educated workers after controlling for wage differences among occupations and labor force composition? The study relied upon public secondary data retrieved from the National Longitudinal Study of Youth 1979 and 1997 for a large, diverse sample with specific individuals observed repeatedly over time. Regression analysis showed that federal student loan funding was among the factors that explained 30.1% of variance in wage at five years after graduation with first baccalaureate degree (beta = -.000, t(5, 2099) = -2.608, p < .05) and 27.3% of variance in wage growth from one to five years after first baccalaureate degree (beta = -0.131, t(6, 2098) = -2.236, p < .05).;Keywords: Student loan, wage inequality, human capital accumulation, college-educated workers. |
