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Inequality of Educational Opportunity? Schools as Mediators of the Intergenerational Transmission of Income

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  • Jesse Rothstein

Abstract

Chetty et al. (2014b) show that children from low-income families achieve higher adult incomes, relative to those from higher income families, in some commuting zones (CZs) than in others. I investigate whether children’s educational outcomes help to explain the between-CZ differences. I find little evidence that the quality of schools is a key mechanism driving variation in intergenerational mobility. While CZs with stronger intergenerational income transmission have somewhat stronger transmission of parental income to children’s educational attainment and achievement, on average, neither can explain a large share of the between-CZ variation. Marriage patterns explain two-fifths of the variation in income transmission, human capital accumulation and returns to human capital each explain only one-ninth, and the remainder of the variation (about one-third) reflects differences in earnings between children from high- and low-income families that are not mediated by human capital. This points to job networks and the structure of local labor and marriage markets, rather than the education system, as likely factors influencing intergenerational economic mobility.

Suggested Citation

  • Jesse Rothstein, 2018. "Inequality of Educational Opportunity? Schools as Mediators of the Intergenerational Transmission of Income," NBER Working Papers 24537, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24537
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    1. Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
    2. Timothy N. Bond & Kevin Lang, 2013. "The Evolution of the Black-White Test Score Gap in Grades K–3: The Fragility of Results," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1468-1479, December.
    3. Flavio Cunha & James J. Heckman, 2008. "Formulating, Identifying and Estimating the Technology of Cognitive and Noncognitive Skill Formation," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    4. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    5. Brian Jacob & Jesse Rothstein, 2016. "The Measurement of Student Ability in Modern Assessment Systems," Journal of Economic Perspectives, American Economic Association, vol. 30(3), pages 85-108, Summer.
    6. Jesse Rothstein & Nathan Wozny, 2013. "Permanent Income and the Black-White Test Score Gap," Journal of Human Resources, University of Wisconsin Press, vol. 48(3), pages 510-544.
    7. Melissa S. Kearney & Phillip B. Levine, 2014. "Income Inequality and Early Nonmarital Childbearing," Journal of Human Resources, University of Wisconsin Press, vol. 49(1), pages 1-31.
    8. Eric Nielsen, 2015. "Achievement Gap Estimates and Deviations from Cardinal Comparability," Finance and Economics Discussion Series 2015-40, Board of Governors of the Federal Reserve System (U.S.).
    9. Rothstein, J.M.Jesse M., 2004. "College performance predictions and the SAT," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 297-317.
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    Citations

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    Cited by:

    1. Falk, Armin & Kosse, Fabian & Pinger, Pia, 2020. "Mentoring and Schooling Decisions: Causal Evidence," IZA Discussion Papers 13387, Institute of Labor Economics (IZA).
    2. Paul Gregg & Lindsey Macmillan & Claudia Vittori, 2019. "Intergenerational income mobility: access to top jobs, the low-pay no-pay cycle and the role of education in a common framework," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(2), pages 501-528, April.
    3. James F. Albertus & Michael Smolyansky, 2019. "Does Intergenerational Mobility Increase Corporate Profits?," Finance and Economics Discussion Series 2019-081, Board of Governors of the Federal Reserve System (U.S.).
    4. Cécile Bonneau, 2020. "The Concentration of investment in education in the US (1970-2018)," Working Papers halshs-02875965, HAL.
    5. Jean-William Laliberté, "undated". "Long-term Contextual Effects in Education: Schools and Neighborhoods," Working Papers 2019-01, Department of Economics, University of Calgary.
    6. Marie Connolly & Catherine Haeck & Jean-William P. Laliberté, 2020. "Parental Education and the Rising Transmission of Income between Generations," NBER Chapters, in: Measuring and Understanding the Distribution and Intra/Inter-Generational Mobility of Income and Wealth, National Bureau of Economic Research, Inc.
    7. Mookerjee, Sulagna & Slichter, David, 2018. "Test Scores, Schools, and the Geography of Economic Opportunity," MPRA Paper 89101, University Library of Munich, Germany.
    8. Dadon-Golan, Zehorit & BenDavid-Hadar, Iris & Klein, Joseph, 2019. "Revisiting educational (in)equity: Measuring educational Gini coefficients for Israeli high schools during the years 2001–2011," International Journal of Educational Development, Elsevier, vol. 70(C), pages 1-1.
    9. Lars J. Lefgren & Jaren C. Pope & David P. Sims, 2019. "Contemporary State Policies and Intergenerational Income Mobility," NBER Working Papers 25896, National Bureau of Economic Research, Inc.
    10. Cécile Bonneau, 2020. "The Concentration of investment in education in the US (1970-2018)," World Inequality Lab Working Papers halshs-02875965, HAL.

    More about this item

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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