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Post-Secondary Attendance by Parental Income: Comparing the U.S. and Canada

This paper makes three contributions to the literature on educational attainment gaps by family income. First, we conduct a parallel empirical analysis of the effects of parental income on post- secondary (PS) attendance for recent high school cohorts in both the U.S. and Canada using data from the 1997 Cohort of the National Longitudinal Survey of Youth and Youth in Transition Survey. We estimate substantially smaller PS attendance gaps by parental income in Canada relative to the U.S., even after controlling for family background and adolescent cognitive achievement. Second, we develop an intergenerational schooling choice model that sheds light on the role of four potentially important determinants of the family income -- PS attendance gap: (i) borrowing constraints, (ii) a 'consumption value' of attending PS school, (iii) the earnings structure, and (iv) tuition policies and the structure of financial aid. Third, we document Canada -- U.S. differences in financial returns to PS schooling, tuition policy, and financial aid, discussing the extent to which these differences contribute to the stronger family income -- attendance relationship in the U.S. Most notably, we document the dependence of both non-repayable financial aid and government student loan access on parental income in both countries.

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File URL: http://economics.uwo.ca/chcp/workingpapers_docs/wp2010/Belley_Frenette_Lochner03.pdf
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Paper provided by University of Western Ontario, CIBC Centre for Human Capital and Productivity in its series University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers with number 20103.

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Date of creation: 2010
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Handle: RePEc:uwo:hcuwoc:20103
Contact details of provider: Postal: CIBC Centre for Human Capital and Productivity, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/research/research_papers/cibc_workingpapers.html

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  1. J.B. Burbidge & L. Magee & A.L. Robb, 2001. "The Education Premium in Canada and the United States," Social and Economic Dimensions of an Aging Population Research Papers 60, McMaster University.
  2. Philippe Belley & Lance Lochner, 2007. "The Changing Role of Family Income and Ability in Determining Educational Achievement," Working Papers 2011-037, Human Capital and Economic Opportunity Working Group.
  3. Meta Brown & John Karl Scholz & Ananth Seshadri, 2012. "A New Test of Borrowing Constraints for Education," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 511-538.
  4. Corak, Miles & Lipps, Garth & Zhao, John, 2004. "Family Income and Participation in Post-Secondary Education," IZA Discussion Papers 977, Institute for the Study of Labor (IZA).
  5. Pedro Carneiro & James J. Heckman, 2002. "The Evidence on Credit Constraints in Post-Secondary Schooling," NBER Working Papers 9055, National Bureau of Economic Research, Inc.
  6. Lance J. Lochner & Alexander Monge-Naranjo, 2010. "The Nature of Credit Constraints and Human Capital," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20101, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  7. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
  8. John Cawley & James Heckman & Edward Vytlacil, 1998. "Understanding the Role of Cognitive Ability in Accounting for the Recent Rise in the Economic Return to Education," NBER Working Papers 6388, National Bureau of Economic Research, Inc.
  9. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
  10. Frenette, Marc, 2003. "Access to College and University: Does Distance Matter?," Analytical Studies Branch Research Paper Series 2003201e, Statistics Canada, Analytical Studies Branch.
  11. Frenette, Marc, 2005. "Is Post-secondary Access More Equitable in Canada or the United States?," Analytical Studies Branch Research Paper Series 2005244e, Statistics Canada, Analytical Studies Branch.
  12. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc.
  13. Frenette, Marc, 2007. "Why Are Youth from Lower-income Families Less Likely to Attend University? Evidence from Academic Abilities, Parental Influences, and Financial Constraints," Analytical Studies Branch Research Paper Series 2007295e, Statistics Canada, Analytical Studies Branch.
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