Sep 13, 2016

Educational Trends Within 35-and-Up Wealth Quintiles

Previously I wrote about educational composition within under-35 wealth quintiles as a way of testing the reliability of a prison study which used wealth at 20-28 as a marker for class. (Again, I must note that I had much help from Matt Bruenig, both for the idea and the execution.)

My main result was that the bottom wealth quintile for 1989 (near when their study was done) was unusually well-educated, thus demonstrating that wealth at a young age is not a reliable marker for class.

I thought I would confirm this result by looking at 35-and-up families in the Survey of Consumer Finances. It's the same calculations, just with different families. If the previous hypothesis is correct, in this group we should see a smooth increase in educational attainment with increasing wealth. Here's the chart:
As I suspected. Not quite perfect, but very close.

Now, just for fun, here are the same time series charts I did for each under-35 wealth quintile in my previous post, but for 35 and up.
No real big trends to notice here, except for a general increasing educational attainment as we go up the wealth quintiles — and an odd sustained increase in grad school in the third quintile. No idea what that's about, honestly.

Up next: determining the break points separating the wealth quintiles.

Sep 6, 2016

Educational Trends Within Under-35 Wealth Quintiles

Last week, with much help from Matt Bruenig, I wrote a post using microdata analysis of the 1989 Survey of Consumer Finances. Since I have the script, I figure I might as well make full use of it, both for practice and to see what I can find.

So for a start, here are some time series trends for educational attainment within income quintiles for under-35 families. Basically what we're doing here is breaking the under-35 population into fifths based on their wealth, determining the educational background of each fifth, and plotting the change over time using the SCF surveys, which are done every three years. (This starts at 1989 and runs through 2013, the most recent survey.)

I bet there is a way to cram all this into one graph, but for the time being here are some simple line charts for each income quintile.

A few things jump out here. The education level of the top wealth quintile is increasing over time, which makes intuitive sense. 

But surely most striking is the high level of education in the bottom quintile. This group is not the least educated, and its education level has increased over time. The share of people with any grad school education and up has doubled for this group, and the share of college graduates has nearly tripled. Interestingly, in the 2013 survey the quintile with the absolute lowest share of less-than-high-school educated families (with 3.3 percent) is the bottom one. 

As I argued in my previous post, wealth at a young age is not a great proxy for overall economic class, because a substantial number of future rich people will appear wealth-poor due to taking out loans for education and not having inherited yet. The wealth brackets for the bottom quintile will probably be massively negative (more on this later), and most high school dropouts will not have the credit rating to take on that kind of debt.

Not much is going in with the middle charts, but it's still kind of interesting to see.