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

42 Pages Posted: 11 Feb 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 W. Pardue

University of Maryland - Department of Economics

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Date Written: February 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.

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Suggested Citation

Hershbein, Brad and Kearney, Melissa S. and Pardue, Luke W., College Attainment, Income Inequality, and Economic Security: A Simulation Exercise (February 2020). NBER Working Paper No. w26747, Available at SSRN: https://ssrn.com/abstract=3535337

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 W. Pardue

University of Maryland - Department of Economics ( email )

United States

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