Location and Intergenerational Educational Mobility

Abstract

High school dropouts are more likely to have children in cities where college share is high, while those who received greater education are less likely to have children in these cities. This pattern is puzzling as cities that attract college graduates have higher cost of living, and can be more expensive to raise children, especially for the least educated households. We provide one compelling explanation for why the less educated households locate in high skilled cities – better education for their children. Using the Census and ACS data from 1980 to 2010, our study finds that children in ages 16 to 24 living with a high school dropout head are more likely be enrolled in school in cities with high share of college graduates. We do not find such relationship for children of parents with higher educational attainment. These results hold after addressing endogeneity and self-selection. Further, by examining PUMAs within MSAs, we find that peer effect provides a strong explanation of why the children of the least educated receive most educational benefit from living in a high skilled city. Our findings suggest that location can have greater impact for the children in households with less resource to support them.