Working Paper: NBER ID: w19049
Authors: Nora E. Gordon
Abstract: Goldin and Katz (2008) document the key role that the educational attainment of native-born workers in the U.S. has played in determining changing returns to skill and income distribution in the twentieth century, emphasizing the need to understand the forces driving the supply of educated workers. This paper examines stagnation in high school graduation rates from about 1970 to 2000, alongside dramatic changes in elementary and secondary educational institutions and income inequality over those years. I review the policy history of major changes in educational institutions, including but not limited to the massive increase in school spending, and related literature. I then present descriptive analysis of the relationships between income inequality and both graduation and school spending from 1963 to 2007. Results suggest that inequality at the top of the income distribution, which was negatively correlated with the establishment of public secondary schooling earlier in the twentieth century, was positively correlated not only with education spending levels but also with aggregate high school graduation rates at the state level in this later period.
Keywords: No keywords provided
JEL Codes: I20; I24; I28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income inequality (D31) | educational spending (H52) |
| income inequality (D31) | high school graduation rates (I21) |
| educational spending (H52) | high school graduation rates (I21) |
| lower income inequality (D31) | establishment of public high schools (I28) |
| changes in educational policy (I28) | stagnation of graduation rates (I24) |