Working Paper: NBER ID: w26747
Authors: Brad Hershbein; Melissa Schettini Kearney; Luke W. Pardue
Abstract: We conduct an empirical simulation exercise that gauges the plausible impact of increased rates of college attainment on a variety of measures of income inequality and economic insecurity. Using two different methodological approaches—a distributional approach and a causal parameter approach—we find that increased rates of bachelor’s and associate degree attainment would meaningfully increase economic security for lower-income individuals, reduce poverty and near-poverty, and shrink gaps between the 90th and lower percentiles of the earnings distribution. However, increases in college attainment would not significantly reduce inequality at the very top of the distribution.
Keywords: college attainment; income inequality; economic security; simulation exercise
JEL Codes: I24; I26; I30; J21; J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased rates of college attainment (I24) | increase in economic security for lower-income individuals (H53) |
| increased rates of college attainment (I24) | reduction in poverty and near-poverty rates (I32) |
| increased rates of college attainment (I24) | shrinkage of earnings gaps between the 90th percentile and lower percentiles of the earnings distribution (D31) |
| increased college attainment (I24) | improve economic security for lower-income individuals (H53) |
| increased college attainment (I24) | not significantly reduce income inequality at the very top of the distribution (D31) |