IDEAS home Printed from https://ideas.repec.org/a/fip/fedlrv/96145.html
   My bibliography  Save this article

The Changing Role of Family Income in College Selection and Beyond

Author

Listed:
  • Oksana Leukhina

Abstract

Previous literature has established that the role of family income has grown substantially at predicting college entry decisions when comparing the 1979 and 1997 National Longitudinal Surveys of Youth (e.g., Belley and Lochner (2007)). In this article, I further examine the changing role of family income as a determinant of college quality choice, degree attainment, and post-schooling earnings. I document that the role of family income has remained important and relatively stable at explaining college quality choice, its importance increasing only for the choice of four- over two-year colleges. In contrast, pre-college academic achievement has become much more important at predicting college quality choice, indicating a substantial strengthening of student college sorting. I also document that for a given college type, family income has remained an important predictor of graduation outcomes, its effect staying similar in magnitude. However, its role in explaining the post-schooling earnings of college graduates has dropped substantially. In contrast, the quality of the degree-granting college has become a much stronger determinant of both graduation outcomes and post-graduation earnings. I argue that all of these findings are consistent with the hypothesis of rising returns to college coupled with tighter financial constraints

Suggested Citation

  • Oksana Leukhina, 2023. "The Changing Role of Family Income in College Selection and Beyond," Review, Federal Reserve Bank of St. Louis, vol. 105(3), pages 198-222, July.
  • Handle: RePEc:fip:fedlrv:96145
    DOI: 10.20955/r.105.198-222
    as

    Download full text from publisher

    File URL: https://files.stlouisfed.org/files/htdocs/publications/review/2023/07/14/the-changing-role-of-family-income-in-college-selection-and-beyond.pdf
    File Function: Full text
    Download Restriction: no

    File URL: https://libkey.io/10.20955/r.105.198-222?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    college selection; family income;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlrv:96145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott St. Louis (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.