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College Attainment, Income Inequality, and Economic Security: A Simulation Exercise

Author

Listed:
  • Brad Hershbein
  • Melissa S. Kearney
  • Luke W. Pardue

Abstract

We conduct an empirical simulation exercise that gauges the plausible impact of increased rates of college attainment on a variety of measures of income inequality and economic insecurity. Using two different methodological approaches⁠—a distributional approach and a causal parameter approach⁠—we find that increased rates of BA and AA attainment would meaningfully increase economic security for lower income individuals and shrink gaps between the 90th percentile and lower percentiles. Increases in college attainment would not significantly reduce inequality at the very top of the distribution, as measured by the 99/90 earnings ratio.

Suggested Citation

  • Brad Hershbein & Melissa S. Kearney & Luke W. Pardue, 2020. "College Attainment, Income Inequality, and Economic Security: A Simulation Exercise," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 352-355, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:352-55
    DOI: 10.1257/pandp.20201062
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    Cited by:

    1. Hemelt, Steven W. & Mange, Brennan & Raynor, Samantha, 2025. "Take HEART: Experimental evidence on enhanced advising and postsecondary progress," Economics of Education Review, Elsevier, vol. 107(C).
    2. Brad J. Hershbein & Isabel McMullen & Brian Pittelko & Bridget Timmeney, 2021. "Beyond degrees: Longer term outcomes of the Kalamazoo Promise," Upjohn Working Papers 21-350, W.E. Upjohn Institute for Employment Research.
    3. Albanesi, Stefania & Prados, María, 2022. "Slowing Women's Labor Force Participation: The Role of Income Inequality," CEPR Discussion Papers 16920, C.E.P.R. Discussion Papers.
    4. Ibsen, Kristoffer & Rosholm, Michael, 2024. "What Works? Interventions Aimed At Reducing Student Dropout in Higher Education," IZA Discussion Papers 16853, IZA Network @ LISER.
    5. Amory Gethin, 2023. "Distributional Growth Accounting: Education and the Reduction of Global Poverty," Working Papers halshs-04423765, HAL.
    6. Wright, Nicholas A., 2021. "Need-based financing policies, college decision-making, and labor market behavior: Evidence from Jamaica," Journal of Development Economics, Elsevier, vol. 150(C).
    7. Holzer, Harry J., 2021. "After COVID-19: Building a More Coherent and Effective Workforce Development System in the US," IZA Policy Papers 174, Institute of Labor Economics (IZA).
    8. Stefania Albanesi & Maria Jose Prados, 2022. "Slowing Women’s Labor Force Participation: The Role of Income Inequality," Working Papers 2022-037, Human Capital and Economic Opportunity Working Group.

    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • 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

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