Bump in career earnings for college grads who grew up poor is much smaller than for those from well-to-do backgrounds

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In a new Upjohn Institute working paper, the Institute's Tim Bartik and Brad Hershbein find that college graduates who come from high-income families (400 percent or more of the poverty line), particularly men and whites and those who get graduate degrees, have a much higher chance of accessing the top of the earnings distribution than otherwise similar individuals who come from poorer families. In addition, among persons with a family income background that is “near-poor” (100–200 percent of the poverty line), the returns to college are not particularly high, especially for men and whites—these groups do almost as well with just a high school diploma.

Bartik and Hershbein show that college graduates for low-income families are likely to earn some $300,000 less in career earnings (in present discounted value). And very surprisingly, they also find that the career percentage earnings premium from earning a bachelor’s degree, relative to only a high school diploma, is much lower for individuals who grew up in low-income families.

Read the paper Degrees of Poverty: The Relationship between Family Income Background and the Returns to Education.

Read the newsletter article Degrees of Poverty: Family Income Background and the College Earnings Premium

Research Topics: Job Skills & Standards