Multi-Generational Income Disadvantage and the Educational Attainment of Young Adults

The importance of SES for childhood and later life outcomes is well-documented. Children raised in poor households do worse on cognitive tests, complete fewer years of schooling and have inferior labor market outcomes as young adults, compared to those in non-poor households. Nevertheless, both upward and downward economic mobility are prominent characteristics of American society. As a result, while many low-income parents share similar current attributes, differences in the attributes of their parents (the prior generation) may also affect the outcomes of their children. We use data from the Child Development and Transition to Adulthood Supplements to the Panel Study of Income Dynamics to examine the associations between intergenerational income disadvantages and economic mobility on young adult educational outcomes. We find that young adults who grow up in low-income families are less likely to attend college than those growing up with higher-income parents. Young adults from two-generation low-income families are even less likely to attend college. Those from upwardly mobile families (middle or high income parents who were raised in low income families) are more likely to attend college than young adults raised in downwardly mobile families (low income parents raised in middle or high income families). Young adults growing up in middle or high income homes by parents who were also raised in middle or high income homes have the highest probability of attending college.