States with wide income gaps are linked with low levels of social mobility, according to a new study co-authored by a University of Maryland researcher.
Melissa Kearney, an economics professor at this university, and Phillip Levine, an economics professor from Wellesley College, pooled data from five national surveys spanning several decades to investigate how income inequality affects the rate of high school dropouts among children of low socioeconomic status. Their findings were published in a paper presented by The Brookings Institution this month.
“Low-income boys in more income unequal states and cities are more likely to drop out of school than kids who look like them in states with low inequality,” Kearney said. According to the data, though, this trend doesn’t seem to be as present among girls, she said.
Lack of a high school diploma indicates a low level of potential upward social mobility, according to the study. The study’s definition of social or economic mobility is the likelihood of moving up or down in income distribution; it can also include changes in educational attainment, occupational status and health.
“An important unanswered question in the research literature is: What are the consequences of growing up in an area characterized by high inequality?” Levine said. “Our work moves in that direction.”
Controlling for individual background characteristics, the researchers ran regressions to see if there was a relationship between state-level income inequality and social outcomes, Kearney said. The compiled survey data showed that low-income children are more likely to drop out of school if they live in a place with a greater gap between the bottom and middle of the income distribution.
Specifically, according to the paper, boys of low socioeconomic status from states with high levels of inequality are about 6 percentage points more likely to drop out of high school than boys of similar economic status in low-inequality states.
“We were left with this finding that, in fact, there’s something about state-level income inequality and educational outcomes that is related,” Kearney said. “Our work documents that there is this potentially harmful interaction between inequality and educational and economic outcomes.”
This research suggests low-income children experience a disadvantage in terms of graduating high school, Kearney said.
Kearney and Levine “suggest that this is because kids on the very bottom rungs have a hard time perceiving that they can use education to climb to higher rungs of the ladder, and so they give up on school and drop out,” said Judith Hellerstein, an economics professor from this university who was not involved with the study.
Because education is one of the keys to upward mobility, this impact could lead to a pattern in which these children grow up and, as adults, are on the bottom rungs of the ladder as well, Hellerstein said.
“If the authors are right, we as a society need to work much harder to develop effective methods to change kids’ perceptions of the value of a high school degree and beyond,” she said.
Research like this could have policy implications as well, said Miles Corak, a University of Ottawa economics professor — especially as applied to disadvantaged boys.
“This [study] is consistent with other research and suggests the need for a new gender economics of social mobility,” said Corak, who discussed a draft of the study paper with Kearney and Levine. “Policymakers might be advised to think through the design of income support policies that leave men outside of the reach of the social safety net.”
