Biography:
Dr. Rajashri Chakrabarti is Head of Equitable Growth Studies at the Federal Reserve Bank of New York, where her work focuses on the intersection of macroeconomics and inequality, including labor markets, education, household finance, and climate risk. She additionally leads the Equitable Growth Indicators project, providing disaggregated data on employment, income, spending, and wealth across demographics such as race, gender, and income.
Dr. Chakrabarti's research has been published in several leading journals, including the Journal of Financial Economics, Review of Financial Studies, and Journal of Public Economics. Additionally, she serves on the boards of the Association for Education Finance and Policy and the New York Census Research Data Center, and is an editorial board member of Education Finance and Policy.
A native of India, Dr. Chakrabarti earned both an M.A. and M.Phil. in Economics from Delhi University in 1995 and 1997, respectively. She earned her Ph.D. in Economics from Cornell University in 2004 and completed a post-doctoral fellowship at Harvard University from 2004-2006.
Student Lecture: 22 May 2025
Effects of Changes in the Federal Funds Rate on Household Finance
We use local projection techniques along with cross-sectional heterogeneity to estimate plausibly causal effects of monetary policy on household finance. Comparing counties that differ by leverage, we find that monetary tightening increases the growth of adverse household debt outcomes, including delinquencies, foreclosures and bankruptcies, and decreases the growth of credit scores and of borrowing to purchase houses and cars in more leveraged counties compared to less leveraged ones. Among higher-share subprime, low-income, and higher-share Black counties, those that are more leveraged see an even greater decrease in the growth of auto and mortgage borrowing. Furthermore, we find that the effects of monetary policy are asymmetric -- monetary contraction has larger (absolute) effects than monetary expansion. Exploring mechanisms, we find that the effects of monetary policy are largely mediated by borrowing cost changes in the short term and by changes in employment in the medium/long term following a rate change. Moreover, we find that the transmission of monetary policy is considerably more effective in areas and time periods that have higher shares of Adjustable Rate Mortgages (ARM).
Faculty Lecture: 23 May 2025
State Investment in Higher Education: Effects on Human Capital Formation, Student Debt, and Long-term Financial Outcomes of Students
Most public colleges and universities rely heavily on state financial support. As state budgets have tightened in recent decades, appropriations for higher education have declined substantially. Little evidence exists on how changes in state funding affect student financial and educational outcomes. We present the first such analysis in the literature using new data that leverages the merger of two rich datasets: consumer credit records from the New York Fed’s Consumer Credit Panel (CCP) sourced from Equifax and administrative college enrollment and attainment data from the National Student Clearinghouse. We overcome the endogeneity of state appropriations using an instrument that interacts the baseline share of total revenue that comes from state appropriations at each public institution with yearly variation in state-level funding. Our analysis is conducted separately for two-year and four-year students, and we analyze individuals into their mid-30s. For four-year students, state appropriation increases lead to lower student debt originations and a higher likelihood of earning a BA degree, but we find little effect on other outcomes. In the two-year sector, state appropriation increases lead to more educational attainment, lower student debt originations, delinquency, and default, and better long-run outcomes (e.g., higher spending, lower delinquencies, and increases in credit scores). Examining mechanisms, we find state appropriations increases are passed on to students in the form of lower tuition in the four-year sector but there are no increases in institutional spending. For community colleges, we find evidence of both price reductions and education quality increases. Our results underscore the importance of state support for higher education in driving student debt outcomes and the returns to postsecondary investments students experience.