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The persistent effect of socioeconomic status on education and labor market outcomes

Author

Listed:
  • Juan A. Correa
  • Pablo Gutiérrez
  • Miguel Lorca
  • Raúl Morales
  • Francisco Parro

Abstract

Purpose - This paper aims to study the effect of family socioeconomic status (SES) on academic and labor market outcomes. Design/methodology/approach - The authors used a rich data set of administrative records for test scores, individual background and adult earnings of a cohort of agents, covering a period spanning the agents' upper-secondary education and their early years in the labor market. Findings - The authors find that students with the highest SES obtained a 1.5 standard deviations higher score in the college admission test than students who had the same academic outcomes in the eighth grade test but belong to the lowest SES. Similarly, among students that obtained the same scores in the college admission test, those with the highest SES earned monthly wages 0.7 standard deviations higher than those with the lowest SES. Originality/value - The findings highlight that family socioeconomic background continues to influence outcomes during individuals’ upper secondary education and early years in the labor market.

Suggested Citation

  • Juan A. Correa & Pablo Gutiérrez & Miguel Lorca & Raúl Morales & Francisco Parro, 2019. "The persistent effect of socioeconomic status on education and labor market outcomes," Applied Economic Analysis, Emerald Group Publishing Limited, vol. 27(79), pages 62-90, August.
    • Handle: RePEc:eme:aeapps:aea-06-2019-0007
    DOI: 10.1108/AEA-06-2019-0007
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    More about this item

    Keywords

    Human capital; Inequality; Socioeconomic status; Academic achievement; D39; I24; I25;
    All these keywords.

    JEL classification:

    • D39 - Microeconomics - - Distribution - - - Other
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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