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Title: Income Inequality, Social Mobility, and the Decision to Drop Out of High School
Resulting in 1 citation.
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Kearney, Melissa S. Levine, Phillip B. |
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Income Inequality, Social Mobility, and the Decision to Drop Out of High School Brookings Papers on Economic Activity (Spring 2016): 333-380. Also: Income Inequality, Social Mobility, and the Decision to Drop Out of High School Cohort(s): NLSY79, NLSY97 Publisher: Brookings Institution Keyword(s): Armed Forces Qualifications Test (AFQT); Educational Attainment; High School and Beyond (HSB); High School Diploma; High School Dropouts; Income Distribution; Mobility, Social; National Education Longitudinal Survey (NELS); Socioeconomic Background It is widely documented that places with higher level of income inequality have lower rates of social mobility. But it is an open question whether and how higher levels of inequality actually lead to lower rates of mobility. We propose that one channel through which higher rates of income inequality might lead to lower rates of upward mobility is lower rates of human capital investment among low-income individuals. Specifically, we posit that greater levels of income inequality could lead low-income youth to perceive a lower rate of return on investment in their own human capital. Such an effect would offset any potential "aspirational" effect coming from higher educational wage premiums. The data are consistent with this prediction: Individuals from low socioeconomic backgrounds are more likely to drop out of school if they live in a place with a great gap between the bottom and middle of the income distribution. This finding is robust in relation to a number of specification checks and tests for confounding factors. |
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Bibliography Citation
Kearney, Melissa S. and Phillip B. Levine. "Income Inequality, Social Mobility, and the Decision to Drop Out of High School." Brookings Papers on Economic Activity (Spring 2016): 333-380.
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