We investigate the roles of parents’ economic resources in children’s educational attainment and test the liquidity constraint hypothesis. Using data from the Panel Study of Income Dynamics, we find that parents’ liquid assets have significantly positive associations with years of schooling, high school graduation, and college attendance. We find that the relationship between liquid assets and education is non-linear: children from negative liquid asset households have a higher chance of finishing high school but a lower chance of graduating college than those from zero liquid asset households. Results suggest that we should consider assets when seeking to understand educational mobility.
Subsequent publication: Nam, Y., & Huang, J. (2009). Equal opportunity for all?: Parental assets and children’s educational attainment. Children & Youth Services Review, 31(6) , 625–634. doi:10.1016/j.childyouth.2008.12.002
Project: SEED National Initiative