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The Relationship Between Family Income and Schooling Attainment: Evidence from a Liberal Arts College with a Full Tuition Subsidy Program

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Abstract

Researchers have long been interested in understanding why a Strong relationship between family income and educational attainment exists at virtually all levels of schooling. In part due to a recent increase in the disparity between the wages of college graduates and the wages of individuals with less than a college degree, there has been a specific interest in understanding why individuals from low income families are less likely to graduate from college than other students. Using unique new data obtained directly from a liberal arts school that maintains a full tuition subsidy program, this paper provides direct evidence that family environment reasons that are unrelated to the tuition costs of college are very important. The paper pays close attention to the issue of selection bias by deriving a set of seemingly very plausible conditions under which the estimator of interest is "conservative". The findings, which suggest that non-trivial differences in educational attainment would exist even if tuition was zero for all students, have implications for expensive policy programs such as the full tuition subsidy program that was recently approved by the state of California.

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  • Todd R. Stinebrickner & Ralph Stinebrickner, 2000. "The Relationship Between Family Income and Schooling Attainment: Evidence from a Liberal Arts College with a Full Tuition Subsidy Program," UWO Department of Economics Working Papers 20008, University of Western Ontario, Department of Economics.
  • Handle: RePEc:uwo:uwowop:20008
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    Cited by:

    1. Ralph Stinebrickner & Todd R. Stinebrickner, 2003. "Working during School and Academic Performance," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 449-472, April.
    2. Diego Restuccia & Carlos Urrutia, 2004. "Intergenerational Persistence of Earnings: The Role of Early and College Education," American Economic Review, American Economic Association, vol. 94(5), pages 1354-1378, December.
    3. Su Jin Jez, 2008. "The Influence of Wealth and Race in Four-Year College Attendance," University of California at Berkeley, Center for Studies in Higher Education qt0cc2x5tj, Center for Studies in Higher Education, UC Berkeley.
    4. Hidalgo-Cabrillana, Ana, 2004. "Does asymmetric information promote talented people?," UC3M Working papers. Economics we042809, Universidad Carlos III de Madrid. Departamento de Economía.

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