EARLY FAMILY INTERVENTION, NOT MORE FINANCIAL AID, WILL HELP POORER STUDENTS GO TO UNIVERSITY

Children from poorer families are much less likely to go to university than richer families. Two University of Chicago economists have examined the causes of these ‘enrolment gaps’ in the United States and discovered that early family influence, not family income at about age 17, accounts for almost all of the gaps. Their research, published in the latest issue of the Economic Journal, suggests that in order to give poorer children a better chance of going to university, educational policy should focus more on the role of the family from an early age than on increasing financial aid.

Pedro Carneiro and Nobel Laureate, Professor James Heckman show that short-term financial constraints – ‘credit constraints’ – do not affect college attendance so much as long-run factors that are also associated with family income. Families with more money tend to have children with higher ability and other advantages, across race and sex boundaries.

‘Ability, and not financial resources, in the teenage years accounts for pronounced minority-majority differences in schooling attainment’, they conclude. Indeed, they find that no more than 8% of the US population delay going to college, fail to enrol or fail to complete college because of cash flow problems. And black males and Hispanic females are the least constrained groups.

Carneiro and Heckman explain that long-term family factors are the most decisive. ‘The influences of family factors that are present from birth through adolescence accumulate over many years to produce ability and college readiness. By the time individuals finish high school, and scholastic ability is determined, the scope of tuition policy for promoting college attendance through boosting cognitive and non-cognitive skills is greatly diminished.’

Specifically, ‘Children whose parents have higher income have access to better-quality primary and secondary schools. Children's tastes for education and their expectations about their life chances are shaped by those of their parents. Educated parents are better able to develop scholastic aptitude in their children by assisting and directing their studies.’

The constrained ‘bright but poor’ comprise just 0.2% of the entire US population and can be targeted for financial aid.

Cumulating over all ability groups, only 5.15% of white males are constrained from college enrolment, 4.49% of white females, 5.43% of black females and 4.33% of Hispanic males. The adjustment for ability more than eliminates any gap for black males and Hispanic females. Overall, only 4.19% of the population are constrained from college enrolment.

The strongest evidence for a constraint is for those with the lowest ability, since richer but less bright students often go to college anyway.

Financial aid programmes in the United States have already reached a level that has eliminated the vast majority of credit constraints. Many students facing financial problems now alleviate them by working while at college, while additional financial aid tends to decrease working hours but barely budges the number of overall decisions about post-secondary school education.

Since credit constraints are minimal, educational policy should turn toward improving the family environment from an early age. ‘Gaps in educational attainment related to family background arise in many environments including those with free tuition and no restrictions on college entry,’ Carneiro and Heckman point out.

Other recent research by the authors and others has shown that financial aid increases such as President Clinton's Hope scholarships do not tip the balance enough to close the enrolment gap. An estimated 93% of Hope funds went to children who were going to college anyway. The authors make clear that more tuition subsidies will not close the enrolment gaps between rich and poor, while policy directed toward families is more likely to do so.

ENDS

Notes for Editors: ‘The Evidence on Credit Constraints in Post-Secondary Schooling’ by Pedro Carneiro and James J. Heckman is published in the October 2002 issue of the Economic Journal.

The authors are in the Department of Economics at the University of Chicago, 1126 E. 59th Street, Chicago IL 60637.

For Further Information: contact Professor Heckman on +1-773-702-0634 (fax: +1- 773-702-8490; email: j-heckman@uchicago.edu); or RES Media Consultant Romesh Vaitilingam on 0117-983-9770 or 07768-661095 (email: romesh@compuserve.com).