Overboard

HETEROGENOUS GAP

In search of a more just model for higher education financing

This week, we delve into the persisting inequalities of our higher education system. Since Winston, Hill, and Boyd found that only 10% of students at elite universities came from families who fell within the bottom 40% of the income distribution in 2005, universities across the board have revived efforts to diversify their student bodies.

The idea that there’s a need for greater socioeconomic diversity in higher education is largely uncontroversial, particularly amid growing evidence of the higher earnings potential for college graduates. However, the policies best suited to addressing this gap see far less consensus. ROSINGER, BELASCO, and HEARN in the Journal for Higher Education examine the impact of both means tested and universal policies that replace student loans with grants in financial aid packages. The impact of these policies on socioeconomic diversity is somewhat counterintuitive:

“We found that colleges offering universal discounts experienced increased enrollment among middle-class students. Our study indicates universal no-loan policies represent one strategy to increase access and affordability for the middle-class in the elite reaches of higher education. The study also, however, raises questions about the policies’ effectiveness in addressing access for low-income students and efficiency in targeting aid.”

Link to the full paper.

• For more on the potential for universities to facilitate both the entrenchment and supersession of generational inequalities, see the groundbreaking 2017 paper by Chetty et. al. The authors used fourteen years of federal income tax data to construct mobility report cards of nearly 2000 colleges, provoking a range of new literature in the field. Their findings: “The colleges that have the highest bottom-to-top-quintile mobility rates – i.e., those that offer both high success rates and low-income access – are typically mid-tier public institutions. For instance, many campuses of the City University of New York (CUNY), certain California State colleges, and several campuses in the University of Texas system have mobility rates above 6%… Elite private (Ivy-Plus) colleges have an average mobility rate of 2.2%.” Link to the paper, as well as the digitization of its results, courtesy of the New York Times.
• Drawing on “Mobility Report Cards,” a recent paper by Bloome, Dyer, and Zhou finds that parental income has become less predictive of adult income, offsetting inter-generational income persistence resulting from education. Link.
• Anna Manzoni and Jessi Streib find that wage gaps between first- and continuing-generation college students are not caused by the institutions they attend, the grades they earn, or the subjects they study: “Our decomposition analysis shows that the uneven distribution of students into labor market sectors, occupations, hours worked, and urban locations is more responsible for the wage gap than the distribution of students into and within educational institutions.” Link.
• A book on the trials and tribulations of building and maintaining the “Harvard of the proletariat”: Anthony Picciano and Chet Jordan on the history of the CUNY system. Link.
  ‡ ISAs inequality higher_ed

New Researchers: HIDDEN COSTS

A look at the economic impact of armed conflict in non-conflict areas

In his job market paper, Northwestern PhD candidate ALEXEY MAKARIN examines the multifaceted effects of armed conflict on the economy, particularly in non-conflict areas. Marakin uses the ongoing Russian military intervention in Ukraine as a case study and finds that Ukranian counties with pre-existing ties to Russia experience a smaller drop in trade than counties with more prominent anti-Russian sentiments. The paper contributes to a growing literature on the indirect impacts of conflict on economic activity, and is the first to document a negative impact of these conflicts on business operations in firms outside the conflict area.

From the paper:

“Ukrainian firms from counties with fewer ethnic Russians experienced a deeper decline in trade with Russia. We argue that this result stems from increased ethnic tensions and a differential rise in negative attitudes and beliefs about Russia. Possible mechanisms include consumer boycotts of Russian products, reputational concerns of Ukrainian firms, and a breakdown of trust in contract enforcement. In contrast, we find no evidence for individual-level animosity between firms’ key decision makers or discrimination at the border. We also rule out that the differential decline in trade arises only from economic spillovers, such as refugee flows and destruction of supply chains with conflict areas.”

Link to the full paper here.

Each week we highlight great work from a graduate student. Have you read any excellent student work recently that you’d like to see shared here? Send it our way: editorial@jainfamilyinstitute.org.

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• We contributed to a report commissioned by the Mayor’s Office of Chicago for Chicago Resilient Families Task Force looking at how EITC expansions or guaranteed income could tackle inequality in that city. We are excited to see it published this week. Link.
• At our blog Phenomenal World, we’ve added several papers to our UBI / guaranteed income literature review, authored by Gary Tan, Maya Adereth, and Sidhya Balakrishnan. Link to the expanded version.
• A comprehensive new study by James Bessen, Maarten Goos, Anna Salomons, and Wiljan Van den Berge provides “the first estimate of the impacts of automation on individual workers.” Link.
• From the UK research group Autonomy, a report advocating for the four-day work week. “There is no positive correlation between productivity and the amount of hours worked per day.” Link.
• By Eric Bettinger et al: tracking the long run effects of California’s state-based financial aid program, Cal Grant. Link.
• An excellent post at CDG from back in December by Pamela Jakiela draws some insights out of the World Bank’s Worldwide Bureaucracy Indicators database, on the geographical distribution of public employees, the gender composition of bureaucrats, and the relationship between public sector wages and corruption. Link to the post, link to the database.
• Following the net rise in the structural power of large European banks. By Pepper Culpepper and Tobias Tesche. Link.
• I argue that Copts’ conversion to Islam between 641 and 186 was characterized by selection on socioeconomic status due to the tax system. Upon the Conquest, Arabs imposed an annual poll tax on every adult free Coptic male, which was enforced until 1856. As conversion freed Copts from the poll tax liability, and since the conversion incentive was decreasing in income owing to the lump-sum feature of the tax, I hypothesize that the tax caused the conversion of poorer Copts, leading Copts to shrink into a better-off minority.” A 2017 paper on the economics of conversion by economic historian Mohamed Saleh. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org