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Why are high ability individuals from poor backgrounds under-represented at university?

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  • Buly A Cardak

    ()
    (School of Economics, La Trobe University)

  • Chris Ryan

    ()
    (Social Policy Evaluation, Analysis and Research Centre, RSSS, Australian National University)

Abstract

We analyse data in which individuals from low socio-economic status (SES) backgrounds have lower university participation rates than those from higher SES backgrounds. Our focus is on the role played by credit constraints in explaining these different participation rates. We propose a multi-stage model of education where university participation is contingent on ability to pay and high school academic performance, which depends on family SES and innate student ability. We find no evidence that credit constraints deter high achieving students from attending university in Australia, a country with an income contingent loan scheme for higher education tuition fees. We do, however, find that how students convert their earlier school performance into the scores on which university entrance is based is contingent on their SES. That is, for students of similar ability, those from higher SES backgrounds are more likely to obtain university entrance scores and achieve higher scores if they do. Hence, policy interventions that rectify the credit constraint problem that faces individuals at the time they make university entrance decisions are not sufficient to equalize university participation across social groups.

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File URL: http://www.latrobe.edu.au/__data/assets/pdf_file/0010/130897/2006.04.pdf
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Bibliographic Info

Paper provided by School of Economics, La Trobe University in its series Working Papers with number 2006.04.

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Length: 44 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:trb:wpaper:2006.04

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Web page: http://www.latrobe.edu.au/economics
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Related research

Keywords: university participation; credit constraints; ability;

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References

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  1. Bruce Chapman, 2005. "Income Contingent Loans for Higher Education: International Reform," CEPR Discussion Papers 491, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  2. Barsky R. & Bound J. & Charles K.K. & Lupton J.P., 2002. "Accounting for the Black-White Wealth Gap: A Nonparametric Approach," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 663-673, September.
  3. Lorraine Dearden & Javier Ferri & Costas Meghir, 1998. "The effect of school quality on educational attainment and wages," IFS Working Papers W98/03, Institute for Fiscal Studies.
  4. Chapman, Bruce & Ryan, Chris, 2005. "The access implications of income-contingent charges for higher education: lessons from Australia," Economics of Education Review, Elsevier, vol. 24(5), pages 491-512, October.
  5. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  6. Anh T. Le & Paul W. Miller, 2005. "Participation in Higher Education: Equity and Access?," The Economic Record, The Economic Society of Australia, vol. 81(253), pages 152-165, 06.
  7. Chapman, B., 1996. "Conceptual Issues and the Australian Experience with Income Contingent Charges for Higher Education," CEPR Discussion Papers 350, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  8. Laporte, Christine & Lascelles, Eric & Finnie, Ross, 2004. "Family Background and Access to Post-secondary Education: What Happened over the 1990s?," Analytical Studies Branch Research Paper Series 2004226e, Statistics Canada, Analytical Studies Branch.
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Citations

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Cited by:
  1. Booth, Alison L. & Katic, Pamela, 2012. "Cognitive Skills, Gender and Risk Preferences," IZA Discussion Papers 6997, Institute for the Study of Labor (IZA).
  2. Robert Tanton & Honge Gong & Ann Harding, 2011. "Multiple Generation Disadvantage: How Communities Affect the Outcomes of Different Generations," NATSEM Working Paper Series 11/05, University of Canberra, National Centre for Social and Economic Modelling.
  3. Nicolas Hérault & Guyonne Kalb, 2009. "Intergenerational Correlation of Labour Market Outcomes," Melbourne Institute Working Paper Series wp2009n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  4. Buly A Cardak & Chris Ryan, 2007. "Participation in Higher Education: Equity and Access: Are Equity-based Scholarships an Answer?," Working Papers 2007.03, School of Economics, La Trobe University.
  5. Bruce Chapman, 2007. "Higher Education Financing in Australia," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 5(2), pages 55-61, 07.
  6. Juan D. Barón & Deborah Cobb-Clark, . "Are Young People's Educational Outcomes Linked to their Sense of Control?," Borradores de Economia 599, Banco de la Republica de Colombia.
  7. Bruce Chapman, 2008. "The Australian University Student Financing System : The Rationale for, and Experience with, Income Contingent Loans," EABER Working Papers 21944, East Asian Bureau of Economic Research.
  8. Bruce Chapman & Mark Rodrigues & Chris Ryan, 2007. "HECS for TAFE: The case for extending income contingent loans," Treasury Working Papers 2007-02, Treasury, Australian Government, revised Apr 2007.

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