Economics Thesis: The Effects of Parental Income on Children's Educational Attainment

Abstract

This thesis explores how parental income influences a child's likelihood of attaining higher education. Using data from the IPUMS Current Population Survey (2009–2019), I applied Ordinary Least Squares (OLS) regression while controlling for factors such as age, gender, race, and marital status. Results reveal that higher parental income significantly increases the chance of a child completing higher education, though the effect diminishes over time. These findings underscore the critical role of family income in shaping educational opportunities.

Motivation

Children's education is a key driver of social mobility, yet disparities persist in access and outcomes. I am passionate about improving the education system in the United States to provide equitable opportunities for all children, regardless of their family's financial background. This project aims to quantify the effects of parental income and lay the groundwork for actionable policy recommendations.

Current Progress

I am continuing to refine the analysis and code for this research. The topic is complex, and I aim to address additional questions, such as the combined effects of parental income and parental education on children’s higher education attainment. Future work will include:

• Expanding the analysis to incorporate regional variations in educational outcomes.
• Investigating policy solutions that reduce disparities, such as free preschool or increased support for low-income families.

Methodology

• Dataset: IPUMS Current Population Survey (2009–2019), selected to avoid data distortion from the Great Recession and COVID-19.
• Statistical Model: Ordinary Least Squares (OLS) regression.
• Tools Used: Stata for data cleaning, analysis, and visualization.

Key Findings

• A 1% increase in parental income correlates with a 0.0253 percentage point rise in the likelihood of children pursuing higher education.
• Socioeconomic factors, including race, gender, and marital status, also play critical roles in shaping educational outcomes.

Repository Contents

• CLEANED_Parent_Inc_on_Child_Educ.do: Stata script for data cleaning and analysis.
• ECO240_FinalPaper.pdf: Full paper detailing the analysis and results.

Future Directions

This thesis is a work in progress. My next steps include:

• Exploring how parental education interacts with income to influence outcomes.
• Expanding the dataset and scope of analysis to include other factors, such as school quality and community resources.
• Proposing detailed, evidence-based policy solutions to improve educational equity.