College Attainment, Income Inequality, and Economic Security: A Simulation Exercise
AbstractWe 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 BA and AA attainment would meaningfully increase economic security for lower income individuals and shrink gaps between the 90th percentile and lower percentiles. Increases in college attainment would not significantly reduce inequality at the very top of the distribution, as measured by the 99/90 earnings ratio.
CitationHershbein, Brad, Melissa S. Kearney, and Luke W. Pardue. 2020. "College Attainment, Income Inequality, and Economic Security: A Simulation Exercise." AEA Papers and Proceedings, 110: 352-55. DOI: 10.1257/pandp.20201062
- C63 Computational Techniques; Simulation Modeling
- I23 Higher Education; Research Institutions
- I26 Returns to Education
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials