Asset Building Financial Inclusion Working Paper

Changing Roles of Parental Economic Resources in Children’s Education Attainment

We investigate whether the relationship between parents’ economic resources and children’s educational attainment has changed over time by comparing two cohorts from the Panel Study of Income Dynamics. We examine multiple measures of economic resources, including income, net worth, liquid assets, and homeownership. We employ probit regressions and Chow tests in multivariate analyses. Results show that the associations between parents’ liquid assets and college attendance became significantly stronger among the later cohort, suggesting the increasing importance of liquid assets. of particular interest is a change in the role of negative liquid assets (unsecured debt exceeding savings) in high school graduation: among the earlier cohort there was no difference in likelihood of graduation between students whose families had negative liquid assets and those from families with zero liquid assets, but among the later cohort students from families with negative liquid assets were more likely to graduate. Results demonstrate the importance of employing diverse measures of economic resources in studying educational mobility. We may need to consider saving incentives and expansion of credit market access among families with few economic resources to improve educational outcomes.

Subsequent publication: Nam, Y., & Huang, J. (2011). Changing roles of parental economic resources in children’s educational attainment. Social Work Research, 35(4), 203–213. doi:10.1093/swr/35.4.203

Project: College Success


Nam, Y., & Huang, J. (2008). Changing roles of parental economic resources in children’s educational attainment (CSD Working Paper No. 08-20). St. Louis, MO: Washington University, Center for Social Development.