Family Heterogeneity, Human Capital Investment and College Attainment

Dec. 14, 2021 - Adam Blandin and Christopher Herrington.

Citation: Blandin, Adam and Christopher Herrington.  Family Heterogeneity, Human Capital Investment and College Attainment. American Economic Journal: Macroeconomics, Forthcoming.

Research Summary:

From 1995 to 2015, college completion by age 28 increased almost 50% in the U.S. Yet while graduation increased from 55% to 66% for children raised in two-parent homes with at least one college-educated parent, it only increased from 12% to 14% for those raised by a single, non-college educated parent. about 11% raised in two-parent homes with at least one college-educated parent, it only increased by about 2% for those raised by a single, non-college educated parent.

We developed a model in which parents can improve college readiness by making educational investments while their children are young. Our study shows that increased investments can generate about half of the observed increase in college completion. Furthermore, subsidizing such pre-college investments for children from disadvantaged backgrounds is more effective than equally costly alternatives such as tuition subsidies or cash transfers.