|Title||Family income and children’s outcomes: evidence for the UK|
This thesis explores inequalities in educational attainment by family
background, focusing on three specific aspects of this important issue.
University participation is one outcome which displays large gaps by
family background. I examine the effect of debt aversion on university
participation and find firstly, that young people from all family backgrounds
who are debt averse are less likely to attend university when they finish
school, and secondly, that the size of this effect does not differ substantially by family background. Thus whilst debt aversion poses a barrier to entry into
university, it doesn’t explain the gap in participation rates by family
background. In fact, these gaps open up much earlier and are already
apparent when the children are still very young.
The second empirical chapter uses data at ages 5 and 7 to explore
this further, and shows that family income itself seems to have a direct
impact on children’s cognitive test scores at these ages, with other important
influential factors including the stability of the child’s environment, the
presence of the natural father, and parental behaviours such as taking the
child to the library regularly. As well as highlighting the importance of these
and other factors, this chapter makes a methodological contribution by
introducing an augmented random effects model which helps address issues
of endogeneity and a lack of within-variation in key variables that have faced
similar studies in the past.
Finally, children’s test scores demonstrate substantial stochastic
variation, with the implication that the development trajectories of groups
divided according to ability and family background may demonstrate
regression to the mean effects. Dealing with this statistical phenomenon
using various methods in order to isolate the substantive effects of family
background confirms that bright children from poorer families do drop behind
their peers, providing justification for a continued policy focus on this group. The existence of inequalities in educational outcomes by family
background also has implications for social mobility, which further highlights
the importance of investing in the cognitive development of young children
from disadvantaged backgrounds.