Economic Inequality and Educational Attainment

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At the end of the 20th century, the distribution of household revenue in the USA grew increasingly unevenly. Inequality in income was considered a problem because it exacerbates other social problems (Meyers et al. 223). Some studies show that income inequality is a risk factor for children, in particular in terms of developing and attaining school education. The educational achievement of children with high incomes is rising, according to Mayer (25) while their homosexuals in low incomes decrease with increasing income inequality. Problem and the Research Question
Poor families see virtually a lack of any rise in the living standards. Research show that there are a number of dimensions where children from low income families underperform compared to their peers. Specifically, kids from families with poor backgrounds have been shown to have lower educational achievement, but the mechanism of this relationship has not been clearly stated. The ultimate question is whether other factors other than money contribute to the observed outcome. Therefore, the research question of this study is, “Is the financial factor the sole element that makes children from poor families show underperformance in education compared to children from high income families?” This study will therefore explore the existing literature to answer the stated research question.

An Annotated Bibliography

Acemoglu, Daron, and J-S. Pischke. “Changes in the wage structure, family income, and children’s education.” European Economic Review 45.4 (2001): 890-904. http://econ.lse.ac.uk/staff/spischke/nels5.pdf

This was a study by Daron Acemoglu from the Massachusetts Institute of Technology and Jorn Steffen Pischke from the London School of Economics, which was in a journal called European Economic Review in 2001. These authors focused on the effect of parental resources on college education through the exploitation of changes in family income distribution. They assert that income inequality has continued for many decades and it keeps on increasing as time goes by. The poor continue to be poorer with passing years, while the rich continue getting richer. According to the estimates in this study, college enrollment is greatly affected by family income. The results suggest that an increase in family income directly increases the probability of the family affording college education for the children. The results of this study have a strong implication that unlike other family characteristics, family income is dominant in determining rates of college education (897). The authors say that the relatively rich children are constrained by the income factor as far as the attainment of the 4 year college education is concerned. Other than the constraints of the credit market, there are other reasons where income is important since college degree is not purely an investment good, but a consumption good.

Blanden, Jo, and Paul Gregg. “Family income and educational attainment: a review of approaches and evidence for Britain.” Oxford Review of Economic Policy 20.2 (2004): 245-263. http://www.bristol.ac.uk/media-library/sites/cmpo/migrated/documents/wp101.pdf

The authors of this article, who are from the University College London Centre for Economic performance and University of Bristol and Centre for Economic Performance, published it in Oxford Review of Economic Policy journal, and notes the wide recognition that kids from families that are poor financially do not have good educational outcomes compared to children from rich families, and argues that the evidence concerning how this association has changed is not enough to determine the main cause of the observed inequalities. The researchers have demonstrated that the relationship between the family income backgrounds and attainment in education has been rising for many decades and have gone further to show the degree to which the observed correlations are due to the effect of income and not due to other factors related to family backgrounds. To do this, the researchers reviewed literature to assess the different strategies that other researchers used to ascertain the effect of income background on educational attainment. If income is reduced significantly in a year, it results in problems related to securing a degree education (252). The findings show that there is a causal association between income and attainment in education, and that this relationship has been gaining strength over decades.

Chevalier, Arnaud, and Gauthier Lanot. “The relative effect of family characteristics and financial situation on educational achievement.” Education Economics 10.2 (2002): 165-181. http://personal.rhul.ac.uk/urte/247/Papers/EduEco10-2.pdf

This was a research carried out by Arnaud Chevalier and Gauthier Lanot and published in 2002 in a journal called Education Economics. The authors had similar observations like others in this review that the financial backgrounds of children determined their attainment of education. Therefore, the authors sought to determine the mechanism through which the effect of household income affected the education outcomes to ascertain whether financial constraints of the poor families was the main contributing factor, or whether there are other families characteristics other than the financial factor that make children from poor families perform worse than their rich counterparts. To realize the purpose of the study, the authors separated the financial effect on education from other familial characteristics effects. This study agreed with other studies because the findings showed that children from poor families have less potential to invest in education. However, a very interesting observation was made, which showed that there was no notable raise in education investment after financial transfer, which was very important in illustrating the dominance of other characteristics of families other than the financial factor (179). The authors say that parental education influences a child’s educational attainment more than the financial factor. They therefore advice that as far as financial transfer is concerned, it should be effectively done to increase post compulsory decisions in education.

Filmer, Deon, and Lant Pritchett. “The effect of household wealth on educational attainment around the world: Demographic and health survey evidence.” World Bank (1998). http://unpan1.un.org/intradoc/groups/public/documents/UNPAN/UNPAN002379.pdf

This paper was written by two colleagues from the World Bank, Deon Filmer and Pritchett, and all arguments, findings and interpretations therein are theirs and not those of the World Bank, its officials or the represented countries. The authors sought to determine how household wealth affected education attainment. Their findings show that children from poor families might enroll in schools, but drop out quickly due to financial constraints, while there are others that do not get a chance to even enroll in school. Countries also differ in terms of wealth, which is responsible for the difference in the school completion years between the rich and the poor. While in some countries the difference is between one and two years, for other nations it is between 9 and 10 years. This is an important study that shows that high enrolment in the poor population results from social inclusion. Moreover, the study shows that to close the gap in education attainment between the rich and the poor, actions should be taken that increase the demand for schooling of children from poor families (36).

Mayer, Susan E. “How economic segregation affects children’s educational attainment.” Social forces 81.1 (2002): 153-176. http://files.eric.ed.gov/fulltext/ED471165.pdf

This article was authored by Susan Mayer from the University of Chicago, which was published in Social Forces journal in 2002. The author notes that there was an increase in economic segregation in America from 1970 to 1990, which affected education attainment of children from low income families. The school districts that became economically segregated reduced the attainment of education for the low income kids as predicted by the school funding political economy. However, like other researchers that sought to determine the association between income inequality and educational attainment, the author in this study illustrated that increase economic segregation in the same state had no effect on the overall attainment of education, although it increased inequality between the children of high income families and those from low income families. She maintain that this observation is based on the fact that increased segregation raises attainment in education among the children from high income families in the same manner it reduces educational attainment in the children from low income families. Like several other studies, this study found out that increasing segregation of income raises educational attainment inequality between the poor and the rich children (163).

Orr, Amy J. “Black-white differences in achievement: The importance of wealth.” Sociology of Education (2003): 281-304. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.459.6994&rep=rep1&type=pdf

This article was published by Amy Orr of Linfield College in a journal called Sociology of Education. Orr asserts that wealth indicates financial as well as human capital and affects the achievement in education. He goes on to show that it is wealth that can be used to explain the gap in test scores seen between whites and blacks. He says that there are fewer educational opportunities for blacks compared to whites, which makes the blacks disadvantaged on many educational outcomes. He has evidenced from the literature that even today, the gap in the test scores between the whites and the blacks is significant (281). He stresses that even though there are other factors that lead to the disparity in education between the blacks and the whites, family background is the major contributor. Specifically, the findings of the author’s study show that wealth has a constructive effect on educational achievement, and it is the main factor that explains the differences in achievement between blacks and whites. His argument in support of this finding is that the effect of wealth on attainment of education results from the influence it has on the cultural capital exposed to a child (298).

Works Cited

Acemoglu, Daron, and J-S. Pischke. “Changes in the wage structure, family income, and children’s education.” European Economic Review 45.4 (2001): 890-904. http://econ.lse.ac.uk/staff/spischke/nels5.pdf

Blanden, Jo, and Paul Gregg. “Family income and educational attainment: a review of approaches and evidence for Britain.” Oxford Review of Economic Policy 20.2 (2004): 245-263. http://www.bristol.ac.uk/media-library/sites/cmpo/migrated/documents/wp101.pdf

Chevalier, Arnaud, and Gauthier Lanot. “The relative effect of family characteristics and financial situation on educational achievement.” Education Economics 10.2 (2002): 165-181. http://personal.rhul.ac.uk/urte/247/Papers/EduEco10-2.pdf

Filmer, Deon, and Lant Pritchett. “The effect of household wealth on educational attainment around the world: Demographic and health survey evidence.” World Bank (1998). http://unpan1.un.org/intradoc/groups/public/documents/UNPAN/UNPAN002379.pdf

Mayer, Susan E. “How Did the Increase in Economic Inequality between 1970 and 1990 Affect Children’s Educational Attainment? 1.” American Journal of Sociology 107.1 (2001): 1-32.

Mayer, Susan E. “How economic segregation affects children’s educational attainment.” Social forces 81.1 (2002): 153-176. http://files.eric.ed.gov/fulltext/ED471165.pdf

Meyers, Marcia K., et al. “Inequality in early childhood education and care: what do we know?.” Social inequality 223 (2004).

Orr, Amy J. “Black-white differences in achievement: The importance of wealth.” Sociology of Education (2003): 281-304. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.459.6994&rep=rep1&type=pdf

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