Family background is a strong determinant of an individual’s educational achievement and labor market success. Using an economics framework, intergenerational persistence in socioeconomic status can be explained by a variety of factors, including parental investment behavior, credit constraints, and the degree of inequality in society. Genetic transmission from parents to children may also play a role. In addition, the skill formation process is governed by dynamics between different stages of a child’s life, such as complementarities between early and late investments or between informal and formal education. Education policy holds the promise of breaking the strong ties between family background and socioeconomic position by providing publicly accessible education for children of all backgrounds. However, the education system may also perpetuate social inequalities if well-off families are able to protect their children from downward mobility by, for example, moving to neighborhoods with high-quality schools and by providing networks that offer opportunities to succeed. However, a growing number of studies show that educational interventions can have long-lasting effects on students’ outcomes, in particular for disadvantaged students, and that they can be cost-effective. For example, reducing class size, increasing general education spending, tutoring, and improving teacher quality are policy levers that are shown to be successful in this regard. Shifting from selective to comprehensive school systems is also a policy that enhances equality of opportunity. While the evidence on credit constraints and their role for access to higher education is evolving, but still mostly U.S. focused and largely inconclusive, it is a key domain for shaping social mobility given the life-changing impacts that a university degree can have.
Education and Social Mobility
Helena Holmlund and Martin Nybom
Mismatch in Higher Education
The first studies of higher education mismatch were motivated by a desire to understand the consequences of affirmative action policies, which lowered academic admission requirements for underrepresented students (typically disadvantaged racial and ethnic groups). This is the so-called “mismatch hypothesis,” which suggests that affirmative action may actually be harmful because it enables students to attend colleges they are academically underprepared for (“mismatched” to) while squeezing out students who would otherwise have enrolled and succeeded. At its heart, the study of mismatch is motivated by the proposed existence of complementarities between students and courses—the assumption that the highest-achieving students would get the most benefit from attending the highest-quality schools, and vice versa. Both undermatch—where high-attaining students attend low-quality universities—and overmatch—where low-attaining students attend high-quality universities—have been studied. Only a very small number of studies have been able to causally examine the impact of mismatch. A major challenge is that unobserved factors that influence individuals’ decisions to attend a particular college (and for the college to accept them) are likely to affect their likelihood of completion and their probability of doing well in the labor market. Several recent studies have made progress in this area, but the evidence on the impact of mismatch still shows mixed results, suggesting that more research is needed, for example, in studying different policy shocks (e.g., natural experiments such as the use of affirmative action bans, which create exogenous variation in mismatch) for students at different margins. There is also a need to expand the study of mismatch beyond the United Kingdom and the United States, which has been the main focus of studies so far, and also beyond higher education into other contexts such as further education colleges.