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Rising Inequality Schools Rising Inequality, Schools, and Children’s Life Chances

Greg J Duncan and Greg J. Duncan and Richard J. Murnane

Sir Frank Holmes Sir Frank Holmes 1924 1924-2011 2011 1924 1924-2011 2011

Whither Opportunity? Whither Opportunity? Rising Inequality, Schools and Schools, and Children’s Life Ch Chances Edited by Greg J. Duncan and Richard J Murnane Richard J. Murnane Russell Sage and Spencer Foundations, 2011

Family income relative to 1947

Family income relative to 1979

Top 1%: ↑2 69 Top 1%: ↑2.69

NZ and US family income inequality

US NZ US

Source: Perry (2012); US Census Bureau

Why the growing income Why the growing income inequality? q y

• Technological change has fueled
• Technological change has fueled

demand for a higher-skilled kf workforce

Occupational Outlook Handbook

• 1976:

“Secretaries relieve their employers of routine Secretaries relieve their employers of routine duties so they can work on more important matters ” matters.

• 2001:

2001: “Office automation and organizational restructuring have led secretaries to assume a wide range of have led secretaries to assume a wide range of new responsibilities once reserved for managerial and professional staff Many secretaries now and professional staff. Many secretaries now provide training and orientation to new staff, conduct research on the Internet and learn to conduct research on the Internet, and learn to

• perate new office technologies.”

Why?

• Technological change that generally

f d kill d k favored skilled workers

• Globalization
• Globalization
• Decline of unions

Decline of unions

• Falling minimum wage

g g

• Rise of immigration
• Rise of single-parent families

Implications for: children’s achievement and tt i t attainment

Years of schooling completed by U.S. adults

Source: Goldin and Katz (2008), Figure 1.4.

College graduation rates for high and low income children and low income children

Bailey and Dynarski (2011)

Race and income-based gaps in reading hi t i SAT t it achievement in SAT-type units

Reardon (2011)

Race and income-based gaps in reading hi t i SAT t it achievement in SAT-type units

High/low income advantage

Reardon (2011)

Income inequality and children’s attainment: attainment: Are there ANY causal linkages?

Maybe not: Maybe not: E.g., many more single-parent families now than before especially families now than before, especially for high school dropout and g p graduate parents

Macro changes Wages Family incomes Neighborhoods and schools

Increasing single- parent families, assortative mating &

Family processes Child

U.S. social policies

g and schools

assortative mating & incarceration Loss of manufacturing, automatable &

• utsourceable

jobs More maternal

Child

• utcomes

Falling/stagnant real wages for low skill workers Increasing and then constant 50- 10 inequality Increasing inequality in time and More maternal stress (and worse parenting?) Minimum wage, unions & immigration E t Increasing class- based achieve- ment and tt i t Rising real wages for high skill workers Increasing 90-50 inequality Poor kids exposed to Difficulties in attracting and retaining good teachers time and money spent

• n/with kids

Ever-present skill-biased technologica l change favors high- skill workers Increasing residential and school segregatio n attainment gaps Rapid rise in compensation for high-end talent (executives, doctors Explosive p highly mobile peers Adverse effects of worse- performing peers U.S. norms about executive compensation Explosive growth in very high incomes

Has public finance evil been wrought by the superrich ?

p Increasing dual earning couples Immigration Teachers’ unions?

superrich ?

unions? Increasing political support for smaller government (Prop13 Considerable public education innovations, but inadequate given the challenges? Increasing class- based residential segregation did not reduce support for public sector

Dogs that didn’t bark:

(Prop13, Reagan revolution) GE feedback to unfavorable macro changes

Inequality and Children’s Attainments

Families Income Families

Child

inequality School

Child Educational Attainment

functioning

F il i Family income story

Income

What

Income inequality

Family

Child Educational

money can buy Family income

Attainment

Stress and Stress and parenting

Enrichment expenditures on high and low income children low income children

Kaushal, Magnuson and Waldfogel

Income effects on achievement Income effects on achievement

• Experimental evidence:

Gary Income Maintenance Experiment (Maynard and – Gary Income Maintenance Experiment (Maynard and Murnane) – Welfare reform experiment in mid-1990s (Morris et al ) – Welfare reform experiment in mid-1990s (Morris et al.)

• Quasi-experimental evidence:

– EITC (Dahl and Lockner) – Canadian Child Benefit (Milligan and Stabile) Canadian Child Benefit (Milligan and Stabile) – Casino payments (Akee et al.)

Effects of EITC expansion on children’s test scores d th ’ h lth and mothers’ health

Children Mothers

Dahl and Lochner, 2009

F il i Family income story

Income

What

Income inequality

Family

Child Educational

money can buy Family income

Attainment

Stress and Stress and parenting

Income effects on stress

Q i i t l id t l

• Quasi-experimental evidence on maternal

stress

– EITC (Evans and Garthwaite)

• Experimental evidence from the New Hope

work support program

Effects of EITC expansion on children’s test scores d th ’ h lth and mothers’ health

CRP ≥ 0.3 mg/Dl # bad mental health da s g/ health days

Children Mothers

Dahl and Lochner, 2009; Evans and Garthwaite, 2009

School story

School story School story

Income inequality

• Peer

behavior

Child Educational

Residential segregation School behavior

• Student

turnover

Attainment

School functioning

• Teacher

quality

Residential isolation of low- and high income urban households high-income urban households

Authors’ calculations based on data presented in Reardon and Bischoff (2010), Table A1, based on the 10th and 90th percentiles

Peers with problems in low and high income elementary schools elementary schools

Duncan and Magnuson (2011). “Low income” and “high income” are defined as more than 50% or less than 5% of students receiving free or reduced lunch.

Peer effects Peer effects

• Abuse/neglect cases and achievement

(Carrell and Hoesktra) ( )

• ADHD diagnoses boost achievement

(Ai ) (Aizner)

• Classes with more girls boost
• Classes with more girls boost

achievement (Schanzenbach)

Mobility and teacher effects Mobility and teacher effects

• Much higher rates of mobility into and
• ut of schools during the school year for
• ut of schools during the school year for

poor children (Raudenbush)

• Much harder to recruit and retain good

uc a de to ec u t a d eta good teachers in schools teaching poor children (Loeb) children (Loeb)

Future of intergenerational Future of intergenerational mobilty

Men’s intergenerational mobility

Source: Hout and Janus (2011)

Participation in higher education of students whose parents have low levels of education (OECD, 2009)

0.8 0.9 50% 60% Proportion of young students (20‐34 year‐olds) in higher education whose parents have low levels of

Odds ratio

0 6 0.7 0.8 40% 50% education (Left axis) Odds of being a student in higher education if parents have low levels of education (Right axis) 0 4 0.5 0.6 20% 30% parents have low levels of education (Right axis) 0 2 0.3 0.4 10% 20% 0 0 0.1 0.2

• 10%

0% 0.0

• 10%

Future national prosperity Future national prosperity story

Years of schooling completed by U.S. adults

Source: Goldin and Katz (2008), Figure 1.4.

Population that has attained tertiary education (OECD; 2010) Percentage, by age group

70 25 34 ear olds 55 64 ear olds

g , y g g p

%

50 60 25-34 year-olds 55-64 year-olds 30 40 20 30 10

Policy thoughts

• Although income inequality may be the root

Although income inequality may be the root cause, reducing it may not be the most cost- effective policy for boosting school success effective policy for boosting school success

• Attack the problem on three fronts

– Effective pre-K programs Effective pre K programs – Effective school reform E i t (EITC N H ) – Economic support programs (EITC, New Hope)

Race and income-based gaps in reading hi t i SAT t it achievement in SAT-type units

High/low income advantage

Reardon (2011)

gduncan @uci.edu

Odds of accessing higher education by low parental education for 25-34 year olds parental education for 25 34 year olds

OECD (2012)