Skip to content

Two Key Takeaways on Education and Income

Monday, December 9, 2019

During a recent Dialogue with the Fed event, researchers with the St. Louis Fed’s Center for Household Financial Stability explored whether education is the great equalizer. In terms of income and wealth, can first-generation college graduates “catch up” to other college graduates whose parents also attained a four-year degree?

As seen in the video below, Policy Analyst Ana Hernández Kent discussed two of the Center’s key findings.

The Head-Start Effect

Holding demographics—age, race and a household head’s educational attainment— constant, Kent said that families with at least one parent with a college degree can expect higher income at the median than families headed by someone without college-grad parents.

That holds true even if the household head does not personally have a four-year degree: “Even if you’re a non-grad, if your parent has a degree, we would expect your income and your wealth to be higher than someone with no college in either generation,” Kent said. 

The Upward-Mobility Effect

According to the Center, first-generation college graduates get a bigger “boost” up the income ladder after earning a four-year degree than do continuing generation college grads.

For first-gen grads, “we would expect that boost that you get from college to be bigger than for a continuing gen grad,” Kent explained. 

Additional Resources

Posted In Financial  |  Tagged ana hernandez kentcollegeeducationincomewealthdialogue with the feddwtfhousehold financial stabilityhfs
Commenting Policy: We encourage comments and discussions on our posts, even those that disagree with conclusions, if they are done in a respectful and courteous manner. All comments posted to our blog go through a moderator, so they won't appear immediately after being submitted. We reserve the right to remove or not publish inappropriate comments. This includes, but is not limited to, comments that are:
  • Vulgar, obscene, profane or otherwise disrespectful or discourteous
  • For commercial use, including spam
  • Threatening, harassing or constituting personal attacks
  • Violating copyright or otherwise infringing on third-party rights
  • Off-topic or significantly political
The St. Louis Fed will only respond to comments if we are clarifying a point. Comments are limited to 1,500 characters, so please edit your thinking before posting. While you will retain all of your ownership rights in any comment you submit, posting comments means you grant the St. Louis Fed the royalty-free right, in perpetuity, to use, reproduce, distribute, alter and/or display them, and the St. Louis Fed will be free to use any ideas, concepts, artwork, inventions, developments, suggestions or techniques embodied in your comments for any purpose whatsoever, with or without attribution, and without compensation to you. You will also waive all moral rights you may have in any comment you submit.
comments powered by Disqus

The St. Louis Fed uses Disqus software for the comment functionality on this blog. You can read the Disqus privacy policy. Disqus uses cookies and third party cookies. To learn more about these cookies and how to disable them, please see this article.