Research

Prof. Yannelis' research uses empirical evidence and economic theory to study government intervention in credit markets, with a particular emphasis on student loans and financing human capital. A central goal of his research agenda is to understand incentive problems in these markets and inform policymaking, particularly in areas where information is limited or incomplete. His research can broadly be divided into three areas (i) student loans and human capital, (ii) private equity, entrepreneurship and small business and (iii) household finance.

SELECTED PAPERS BY TOPIC

Student Loans and Human Capital

A primary research area is focused on student loans and human capital. Education is the single highest return investment that most households will make. Thus, getting our system of higher education finance right is of fundamental importance. Many of the notorious problems in the student loan market come from the misalignment of incentives between for-profit schools, students and taxpayers that is created by well-intentioned but poorly thought through policies. Earlier work largely focused on identifying problems in the student loan market, while newer and ongoing work is focuses on solutions to correct market failures.

What Went Wrong with Federal Student Loans?
Journal of Economic Perspectives, 38(3),  209-36, Summer 2024
Coauthors: Adam Looney

Debt Moratoria: Evidence from Student Loan Forbearance
American Economic Review: Insights, 6(2), 196-213, June 2024
Coauthors: Michael Dinerstein and Ching-Tse Chen

Tuition, Debt and Human Capital
Review of Financial Studies, 36(4), 1667–1702, April 2023
Best Paper Award, LBS Summer Finance Symposium 2017
Coauthors: Raji Chakrabarti, Slava Fos, and Andres Liberman

The Distributional Effects of Student Loan Forgiveness
Journal of Financial Economics, 147 (2), 297–316, February 2023
Coauthor: Sylvain Catherine

Human Capital Depreciation
American Economic Review, 112 (11), 3725–3762, November 2022
Coauthors: Michael Dinerstein and Rigissa Megalokonomou

Student Loans and Borrower Outcomes
Annual Review of Financial Economics,14, November 2022
Coauthors: Greg Tracey

The Consequences of Student Loan Credit Expansions: Evidence from Three Decades of Default Cycles
Journal of Financial Economics, 143(2), 771-793 February 2022
Coauthor: Adam Looney

Increasing Enrollment in Income-Driven Student Loan Repayment Plans
Journal of Finance, 77(1), 367-402 February 2022
Coauthor: Holger Mueller

A Day Late and a Dollar Short: Liquidity and Household Formation among Student Borrowers
Journal of Financial Economics, 142(3), 1301-1323, December 2021
Coauthors: Adam Isen and Sarena Goodman

The Rise in Student Loan Defaults
Journal of Financial Economics, Lead Article 131(1), 1-31, January 2019
Coauthor: Holger Mueller

Credit Constraints and Demand for Higher Education: Evidence from Financial Deregulation
Review of Economics and Statistics, 98(1), 12-24, March 2016
Coauthor: Stephen Sun

A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions they Attended Contributed to Rising Loan Defaults
Brookings Papers on Economic Activity, Lead Article 2015(2), 1-89, 2015
Coauthors: Adam Looney

Private Equity, Entrepreneurship and Small Business

Other ongoing work focuses on government interventions in credit markets, focusing on small business loans and private equity acquisitions. The efficiency of federal credit market interventions depends on whether these policies correct market failures, or simply act as a subsidy to lenders. The effects of changes corporate control, such as private equity buyouts, may also differ in industries such as education where the government is the client, and where product quality is opaque. 

Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes
Review of Financial Studies, Lead Article 37(4), 1029–1077, March 2024
Editor's Choice, March 2024
Best Health and Finance Paper Award, Midwest Finance Association 2021
NIHCM Foundation Research Award, Finalist
Coauthors: Atul Gupta, Sabrina Howell and Abhinav Gupta

Did the Paycheck Protection Program Hit the Target?
Journal of Financial Economics,145(3), 725–761, September 2022
Coauthors: Joao Granja, Christos Makridis and Eric Zwick

Loan Guarantees and Credit Supply
Journal of Financial Economics, 139 (3), 872-894, March 2021
Coauthors: Natalie Cox and Olivia Kim

When Investor Incentives and Consumer Interests Diverge: Private Equity in Higher Education
Review of Financial Studies, 33 (9), 4024–4060, September 2020
Best Paper Award, Private Equity Research Consortium 2018
Coauthors: Charlie Eaton and Sabrina Howell

Household Finance

A final area of research focuses on household finance and consumer lending markets, with an emphasis on government credit programs and when consumer credit markets fail to function efficiently. This strand of work seeks to study correcting market failures and in particular information asymmetries, and to measure the welfare effects of government interventions and policy.

Competition and Selection in Credit Markets
Journal of Financial Economics, 150(2), 103710, November 2023
Coauthor: Anthony Lee Zhang

Household Behavior (Consumption, Credit and Investments) During the COVID-19 Pandemic
Annual Review of Financial Economics, 15, November 2023
Coauthors: Livia Amato

Income, Liquidity, and the Consumption Response to the 2020 Economic Stimulus Payments
Review of Finance, 27(6), 2271–2304, November 2023
Coauthors: Scott Baker, R.A. Farrokhnia, Steffen Meyer and Michaela Pagel

Epidemic Responses Under Uncertainty
Proceedings of the National Academy of Sciences, 120(2), January 2023
Coauthors: Michael Barnett and Greg Buchak

Measuring the Welfare Costs of Asymmetric Information in Consumer Credit Markets
Journal of Financial Economics,146 (3), 840–793, December 2022
Editor's Choice, December 2022
Best Paper Award, Red Rock Finance Conference 2021
Jensen Prize (2nd Prize), Best Paper in the Journal of Financial Economics 2022
Coauthors: Anthony DeFusco and Huan Tang
Stata Command

How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic
Review of Asset Pricing Studies, 10 (4), 834–862, December 2020
Coauthors: Scott Baker, R.A. Farrokhnia, Steffen Meyer and Michaela Pagel

Financial Inclusion, Human Capital, and Wealth Accumulation: Evidence from the Freedman’s Savings Bank
Review of Financial Studies, 33 (11), 5333–5377, November 2020
Best Paper Award, University of Oregon Summer Finance Conference 2019
Coauthors: Luke Stein

Does Climate Change Affect Real Estate Prices? Only If You Believe in it
Review of Financial Studies, 33 (3), 1256–1295, March 2020
Coauthor: Markus Baldauf and Lorenzo Garlappi

Income Changes and Consumption: Evidence from the 2013 Federal Government Shutdown
Review of Economic Dynamics, 23(1), 99-124, January 2017
Coauthor: Scott Baker

Quantifying the Premium Externality of the Uninsured
Journal of the European Economic Association, 14(2), 405-37, April 2016
Coauthor: Stephen Sun

Active Working Papers

Data and Welfare in Credit Markets
Journal of Financial Economics, R&R
SIX Best Paper Award, Swiss Society for Financial Market Research 2022
Coauthors: Mark Jansen, Fabian Nagel, Anthony Lee Zhang

Discount Factors and Monetary Policy: Evidence from Dual-listed Stocks
Journal of Financial Economics, R&R
Coauthors: Quentin Vandeweyer, Minghao Yang

Skin in the Game: Colleges’ Financial Incentives and Student Outcomes
Coauthors: Nano Barahona, Cauê Dobbin, Hanson Ho, Sebastián Otero

Strategic Default on Student Loans

Best Paper Award, FMA Napa Conference on Financial Markets Research 2017

Corporate Taxes and Prices
Coauthors: Scott Baker and Stephen Sun

Does Climate Change Impact Sovereign Bond Yields?
Coauthor: Michael Barnett

How do Income-Driven Repayment Plans Benefit Student Debt Borrowers?
Coauthors: Sylvain Catherine  and Mehran Ebrahimian

Monetary Policy Transmission Through Online Banks
Coauthors: Isil Erel, Jack Liebersohn, Samuel Earnest

Student Loan Forgiveness
Coauthors: Michael Dinerstein, Samuel Earnest and Dmitri Koustas