Comments on:Higher Education and Social Mobility in the United States: A Glimpse Inside the Black Box?

Lars OsbergEconomics DepartmentDalhousie UniversityJanuary 26, 2007

Public Subsidies to Post-Secondary Education – who benefits ?

WSMH – subsidies increase = of opportunity tuition = access barrier to post-secondary Subsidy benefits students

‘young adults with differing wealth/opportunities’

HA – subsidy to upper & middle class Educational streams separate before post-sec

Stratification in primary & secondary crucial Especially for bottom 20%

Subsidies primarily benefit affluent parents Students = ‘children of unequal families’

What are the transmission mechanismswhich link parents’ Socio-Economic Status (SES) and offspring SES?

parental SES (income, education, occupation) influences child’s income Indirectly – via child’s education &

occupation Directly – given child’s job & schooling

Which pathways matter more? Recursive model

SES => education; SES => job Income <= education, job, SES

Simulate impacts (direct & indirect) of SES

What is “parental SES” ?

1950s – single earner (male) Now a smallish minority

Divorce & remarriage - serial households Dual earners + shifting gender balance in

education – SES of parents & of kids ?

WSMH – when child age = 12-15 Family income – ln (total 4 year total income) ‘prime earner’ – parent with higher occupation

& education Implication – assumed irrelevancy of:

Earlier / later parental influences Spouse’s relative income/occupation/education Gender

Structural breaks in Mobility ? – suppose “middle churns but tails stay”

child attainment

parental SES 1 2 3 4 5

1 0.9

2 0.3 0.3 0.3

3 0.3 0.3 0.3

4 0.3 0.3 0.3

5 0.9

Suppose 3 classes identified – where to draw the line?

child attainment

SES 1 2 3

1 0.9

2 0.9

3 0.9

child attainment

SES 1 2 3

1 0.60 0.25 0.15

2 0.33 0.33 0.33

3 0.15 0.25 0.60

“Structural Breaks in Mobility” – crucial for equality of opportunity

How to partition mobility classes ? Crucial to detection of breaks

WSMH – 3 classes school / job / income Lower = <HS; routine/manual; bottom 25% Middle = HS only; intermediate; mid 50% Upper = attend post-sec; managerial

/professional; top 25%

Transition Matrix mingles 2 issues: Up shift in distributions of education &

occupation Changing places in hierarchy of school & job

Intergenerational Regressions Ordered Probit (3 classes )

Offspring Educationi = a + B*Parental SESi + C*Xi + ei Offspring Occupationi = δ + Θ*Parental SESi + Ω*Xi + ei

ln(Offspring Incomei) = α + β*Parental SESi + Λ* Offspring Educationi + Γ* Offspring Occupationi + C*Xi + εi

Dummy variables for gender, race, immigrant Conley results imply a different structure

Simulations trace direct & indirect impacts of parent SES

Issues: Could compute inter-generational income elasticity & compare No test for similar structure: males/females, black/white

- 50% income if black; + 15% income if female ?? Why not use quantile regression?

OLS – presumes common impact of RHS variables on conditional mean

OLS – choose β to minimize sum squared residuals Outliers acquire

greatest weight Symmetric loss

function

Social Issue here is differential impacts for rich & poor Arguably different

structural process

Quantile regressions – tests difference in impacts by outcome percentile

special case Τ = ½ is equivalent to median regression (which minimizes sum of absolute deviations)

the Τth regression quantile is a solution to the minimization problem

Roger Koenker Quantile Regression, Cambridge University Press, New

York (2005).

Example: Panel 1997-2000 – Robust OLS & Quantile Regression Estimated Impact of Poverty on HAZi

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0 20 40 60 80 100Quanti le

Poverty1997

Quanti l e point estimates95% pointwi se confi dence bandOLS estimate95% confi dence i nterval for OLS estimate

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0 20 40 60 80 100Quanti le

Poverty2000

Quanti l e point estimates95% pointwi se confi dence bandOLS estimate95% confi dence i nterval for OLS estimate

How to test for structurally different mobility processes?What to do?

Conley, Walters, Smith profound black/white differences in mobility

processes Smith & Conley

Security of status – largely attainable at the (ambiguous) top

Changing gender roles Changing structure of serial families

not addressed

Accounting for Intergenerational Income Persistence:Noncognitive Skills, Ability and Education – Blanden, Gregg, Macmillan IZA DP No. 2554 January 2007

UK boys borne 1958 & 1970 Intergenerational heritability high - increases from an

elasticity of 0.205 to 0.291 over 80% increase can be explained

“strengthening influence of family income on non-cognitive traits, education and labour market attachment”

“Cognitive ability offers no substantive contribution to changes in mobility”

Diverging scores by age 16 important trend

Policy Issue – what type of reforms? UK – big shift in 1970s – away from ‘child centred’ to

educational ‘accountability’, Test Score orientation negative impact on self-esteem, efficacy & non-

cognitive traits – especially for vulnerable boys