Dreaming of a Brighter Future? The Impact of Economic Circumstances on University Aspirations

We investigate how economic circumstances (measured in terms of poverty and economic insecurity) impact the educational aspirations of youth, age 12-15. Using the Canadian National Longitudinal Survey of Children and Youth, we find that poverty is associated with reduced university aspirations from the perspective of the youth (9 percentage points) and their mother (12-13 percentage points). Further, poverty incidence matters more than depth. Interestingly, economic insecurity is not associated with educational aspirations, and this result persists regardless of how we measure insecurity. This may be due to the fact that, over time, poverty is more likely to persist than economic insecurity. Consequently, while the latter may be seen as a temporary shock, the former may create a feeling of hopelessness, thereby reducing aspirations. Controls for academic effort, including standardised test scores, daily reading, and getting good grades do not impact these findings. Results therefore suggest that alleviating child poverty may improve educational aspirations at a critical time in a youth’s life.