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Research ArticleArticles

The Income-Achievement Gap and Adult Outcome Inequality

Eric Nielsen
Published online before print February 07, 2023, 0519-10220R3; DOI: https://doi.org/10.3368/jhr.0519-10220R3
Eric Nielsen
Principal Economist, Division of Research and Statistics, Federal Reserve Board. Contact: Division of Research and Statistics, Board of Governors of the Federal Reserve System, Mail Stop 97, 20th and C Street NW, Washington, D.C. 20551. . (202) 872-7591.
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Abstract

This paper uses scale-independent methods to contribute to the debate about how academic achievement differences between advantaged and disadvantaged youth have changed over time in the United States. Ordinal methods reveal an unambiguous decrease in the reading gap and an ambiguous change in the math gap between youth from high- versus low-income households from 1980 to 1997. Anchoring these test scores to later-life outcomes in the 1980 cohort suggests that these achievement shifts correspond to a convergence of $30,000 - $50,000 in present-value lifetime income and 0.02-0.05 in high school and college completion rates for youth from high- versus low-income households.

JEL Codes:
  • I24
  • I21
  • J24
  • C18
  • C14
Keywords:
  • income-achievement gap
  • inequality
  • human capital
  • anchoring
  • ordinal methods

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Journal of Human Resources: 60 (3)
Journal of Human Resources
Vol. 60, Issue 3
1 May 2025
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The Income-Achievement Gap and Adult Outcome Inequality
Eric Nielsen
Journal of Human Resources Feb 2023, 0519-10220R3; DOI: 10.3368/jhr.0519-10220R3

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The Income-Achievement Gap and Adult Outcome Inequality
Eric Nielsen
Journal of Human Resources Feb 2023, 0519-10220R3; DOI: 10.3368/jhr.0519-10220R3
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Keywords

  • I24
  • I21
  • J24
  • C18
  • C14
  • income-achievement gap
  • Inequality
  • human capital
  • anchoring
  • ordinal methods
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