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The effects of economic instability on children's educational outcomes

  • Elliott, William
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    Welfare Based on Assets, a Way to Smooth Out Economic Instability and Develop Children's Human Capital is a four-part series of papers that focuses on the relationship between economic instability (i.e., income shocks, asset shocks, home loss, and asset poverty) and children's human capital development. Collectively, these reports build on the compelling observation that the pattern low-income families walk into is a present time oriented or consumption based pattern of behavior; in contrast, the pattern higher income families walk into is future oriented or asset based. In the third paper we find in most cases income shocks and asset shocks do not appear to be harmful to children's educational outcomes. However, children living in liquid and net worth asset poor families have lower academic achievement scores, high school graduation rates, college enrollment rates, and college graduation rates than children living in families that are asset sufficient. Overall, findings can be interpreted as suggesting that a bifurcated welfare system, with income-based programs for poor families and asset-based programs for higher income families, may provide higher income families with an educational advantage over low-income families and might ultimately help exacerbate educational inequalities in America.

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    Article provided by Elsevier in its journal Children and Youth Services Review.

    Volume (Year): 35 (2013)
    Issue (Month): 3 ()
    Pages: 461-471

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    Handle: RePEc:eee:cysrev:v:35:y:2013:i:3:p:461-471
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    1. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    2. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
    3. Robert Haveman & Edward Wolff, 2004. "The concept and measurement of asset poverty: Levels, trends and composition for the U.S., 1983–2001," Journal of Economic Inequality, Springer, vol. 2(2), pages 145-169, August.
    4. Huang, Jin & Guo, Baorong & Kim, Youngmi & Sherraden, Michael, 2010. "Parental income, assets, borrowing constraints and children's post-secondary education," Children and Youth Services Review, Elsevier, vol. 32(4), pages 585-594, April.
    5. Nam, Yunju & Huang, Jin, 2009. "Equal opportunity for all? Parental economic resources and children's educational attainment," Children and Youth Services Review, Elsevier, vol. 31(6), pages 625-634, June.
    6. Donald L. Lerman & James J. Mikesell, 1988. "RURAL AND URBAN POVERTY: AN INCOME/NET WORTH APPROACH," Review of Policy Research, Policy Studies Organization, vol. 7(4), pages 765-781, 06.
    7. Flavio Cunha & James Heckman & Susanne Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," NBER Working Papers 15664, National Bureau of Economic Research, Inc.
    8. Richard K. Green & Michelle J. White, 1994. "Measuring the Benefits of Homeowning: Effects on Children," Wisconsin-Madison CULER working papers 94-05, University of Wisconsin Center for Urban Land Economic Research.
    9. Kim, Youngmi & Sherraden, Michael, 2011. "Do parental assets matter for children's educational attainment?: Evidence from mediation tests," Children and Youth Services Review, Elsevier, vol. 33(6), pages 969-979, June.
    10. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
    11. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
    12. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts," NBER Working Papers 6385, National Bureau of Economic Research, Inc.
    13. Elliott III, William, 2009. "Children's college aspirations and expectations: The potential role of children's development accounts (CDAs)," Children and Youth Services Review, Elsevier, vol. 31(2), pages 274-283, February.
    14. Elliott, William & Destin, Mesmin & Friedline, Terri, 2011. "Taking stock of ten years of research on the relationship between assets and children's educational outcomes: Implications for theory, policy and intervention," Children and Youth Services Review, Elsevier, vol. 33(11), pages 2312-2328.
    15. Kane, Thomas J, 1994. "College Entry by Blacks since 1970: The Role of College Costs, Family Background, and the Returns to Education," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 878-911, October.
    16. Zhan, Min & Sherraden, Michael, 2011. "Assets and liabilities, educational expectations, and children's college degree attainment," Children and Youth Services Review, Elsevier, vol. 33(6), pages 846-854, June.
    17. Zhan, Min, 2006. "Assets, parental expectations and involvement, and children's educational performance," Children and Youth Services Review, Elsevier, vol. 28(8), pages 961-975, August.
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