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Permanent Income and the Black-White Test Score Gap

  • Jesse Rothstein
  • Nathan Wozny

Analysts often examine the black-white test score gap conditional on current family income. We describe a method for identifying the gap conditional on the family’s permanent income. Current income explains only about half as much of the black-white test gap as does permanent income, and the gap among families with the same permanent income is only 0.2 to 0.3 standard deviations in two commonly used samples. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in third grade shrinks below 0.15 SDs, less than half of what is found with their controls.

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File URL: http://jhr.uwpress.org/cgi/reprint/48/3/510
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 48 (2013)
Issue (Month): 3 ()
Pages: 510-544

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Handle: RePEc:uwp:jhriss:v:48:y:2013:iii:1:p:510-544
Contact details of provider: Web page: http://jhr.uwpress.org/

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  4. Gordon B. Dahl & Lance Lochner, 2010. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20105, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
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