College Attainment, Income Inequality, and Economic Security: A Simulation Exercise

42 Pages Posted: 5 Mar 2020

See all articles by Brad Hershbein

Brad Hershbein

W.E. Upjohn Institute for Employment Research

Melissa S. Kearney

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Luke Pardue

University of Maryland - Department of Economics

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Date Written: January 30, 2020

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: education, college attainment, income inequality, earnings distribution, economic security poverty

JEL Classification: I24, I26, I30, J21, J24, J31

Suggested Citation

Hershbein, Brad and Kearney, Melissa S. and Pardue, Luke, College Attainment, Income Inequality, and Economic Security: A Simulation Exercise (January 30, 2020). Available at SSRN: https://ssrn.com/abstract=3531708 or http://dx.doi.org/10.2139/ssrn.3531708

Brad Hershbein (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

Melissa S. Kearney

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Luke Pardue

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

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