The conventional thinking among economists has been that income inequality would provide incentives for individuals to invest in their potential human capital to climb up the income ladder. But important new research from Melissa Kearney and Phillip Levine challenges that thinking, finding that low-income youth who view middle-class life as out of reach could be deciding to invest less in their own economic future.
Looking at boys’ graduation rates by state, Kearney and Levine find that one-quarter or more of those who start high school in the higher inequality states of Louisiana, Mississippi, Georgia, and the District Columbia fail to graduate in a four-year period, as compared to only around 10 percent in Vermont, Wisconsin, North Dakota, and Nebraska–lower inequality states.
Learn more about the research by reading the full paper, “Income inequality, social mobility, and the decision to drop out of high school,” or exploring the interactive data below.
