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Title: Income Inequality, Social Mobility, and The Decision to Drop Out of High School

Citation Type: Journal Article

Publication Year: 2013

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Abstract: This paper considers the role that high levels of income inequality and low rates of social mobility play in driving the educational attainment of youth in low-income households in the United States. We focus on the likelihood of dropping out of high school. Using educational attainment measured from four individual-level surveys, our analysis reveals that low-SES students who grow up in locations with greater levels of lower-tail income inequality and lower levels of social mobility are more likely to drop out of high school as compared to low-SES students who grow up in more equal and more mobile locations, conditional on other individual characteristics and contextual factors. We investigate a number of potential explanations for this link including residential segregation, public school financing, and differences in cognitive ability and find no empirical support for these mechanisms. We propose that the results are consistent with a class of explanations that emphasize a role for perceptions of ones own identity, position in society, or chances of success. In the end, our empirical results indicate that high levels of income inequality and low levels of mobility hinder economic advancement for disadvantaged youth.

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Authors: Kearney, Melissa; Levine, Phillip

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Data Collections: IPUMS USA

Topics: Education, Poverty and Welfare

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