Executive Summary: “Trends in Children’s Attainments and their Determinants as Family Income Inequality Has Increased” by Robert Haveman, Gary Sandefur, Barbara Wolfe and Andrea Voyer

          The increase in family income inequality since the early-1970s is one of the most cited economic changes that has occurred during this three-decade period.  This increase in family income disparities has direct implications for the well-being of children and their attainments (such as health status, life expectancy, education attainments, poverty rates, crime rates).  We begin with the presumption that the increase in family income inequality will have an effect on both the level of children’s attainments and the inequality among children in these attainments.  We then review the available evidence on some of the linkages between family income disparities and the level and disparity of children’s attainments, adopting an “investment in children” framework.  In this framework, the family and the community are viewed as production units which employ real inputs in order to encourage the attainments of children.    

            In the next section of our paper, we present a historical perspective on the changes in the level and inequality of family income, and the source of these changes.  While the level of family income grew slowly during the 1970s and 1980s, the 1990s witnessed robust growth in family income.  The level of income inequality among families increased persistently over these three decades, with the greatest increases occurring during the decade of the 1980s.  Several factors are viewed as contributing to these trends, including changes in family structure, the growth of earnings inequality, the changing nature of work, increased racial and ethnic diversity among the nation’s families, and shifts in antipoverty policy.

             The third segment moves from this focus on changes in the level and inequality in family income to trends in both the level and inequality of inputs to children’s attainments, and trends in the level and inequality in the attainments themselves. The inputs into children’s attainments on which we focus are those that a sizable research literature has identified as being most closely related to children’s attainments; in addition to family income itself, these include: parental education, family structure, family size, family assets, immigrant status, school quality, child care quality and changes in family location during childhood.  While we are able to identify substantial time trends in the levels of these inputs, virtually no statistical series describes trends in the inequality of those characteristics for which disparities are meaningful. 

              Similarly, we rely on the research literature for guidance in identifying the most salient indicators of children’s attainments.  Four success measures are identified and trends in their levels are also reported; they are: teen childbearing, high school graduation, years of schooling and labor market performance (employment and earnings).  The evidence suggests that in most domains the levels of family resources and young adult outcomes have improved over time. On the other hand, children are less likely to live with two parents than they were in the past and they are more likely to be in childcare as infants and toddlers.  Young adults are doing less well in the labor market now than were young adults in earlier cohorts. 

            Section IV presents our review of the voluminous recent research that has attempted to establish the existence and the strength of the linkages between family/community inputs and children’s attainments. Our review consists of a series of detailed appendix tables summarizing more than 100 studies of the relationship of family and community investments in children and children’s attainments as young adults.  

            From our review, we have learned that in general, parental education is a significant and positive determinant of their child’s attainments; that one’s family’s economic resources are a positive and significant determinant of years of education, post-secondary schooling (college attendance) and employment, earnings and income of the child as a young adult.  We also conclude that growing up in a single parent household or experiencing a parental separation/divorce is significantly associated with the probability of giving birth as a teen and negatively related to the probability of graduating from high school.  We also noted some evidence that changes in the family location tended to be associated with poorer outcomes as an adult though this has not been extensively studied. In terms of aspects that might be thought of as social capital—neighborhood quality and school quality -- we found some limited evidence that better quality were associated with better outcomes.