Association for Public Policy Analysis & Management

The achievement gap between high- and low-income students has increased by about 40% over the past few decades, and it is now larger than the black-white achievement gap. School success predicts many adult outcomes, so income gaps in educational outcomes could lead to increasing economic inequalities in future outcomes like criminality, employment, income, neighborhood residence, and health. Identifying explanations for income stratification in educational outcomes is thus critically important. In this paper, I examine one possible explanation: income segregation in children’s contexts. I test whether income segregation between school districts provides a boost to high-income students’ test scores or reduces the achievement of low-income children, contributing to the achievement gap.

Income segregation between school districts may contribute to the income achievement gap because it concentrates resources associated with academic success in high-income children’s districts while leaving low-income children in districts with few resources. Such resources include school funding, which, despite school finance reform, remains associated with the household income in the district; and student body composition, since the majority of racial and economic segregation between schools is due to segregation between districts, rather than between schools within districts.

I draw on cognitive test score data from the Panel Study of Income Dynamics Child Development Supplement for a nationally representative sample of ~2,000 children age 5 to 15 in 2002-03. The restricted-use PSID data provide indicators of the metropolitan area in which the child lives, and I link child-level data to income segregation between school districts in children’s metropolitan area in 2000. I estimate income segregation across the full income distribution using the rank-order information theory index, drawing on data from the School District Demographic System. I predict children’s math and reading scores from their family income, the level of income segregation in their metropolitan area, and an interaction between family income and income segregation, controlling for child and metropolitan area confounders. These models indicate whether segregation is beneficial for high-income children (or detrimental for low-income children). Preliminary analyses indicate that the benefit of having high-income parents is amplified for students living in metropolitan areas where affluent families are more segregated between school districts. Segregation of affluent families between both school districts and between neighborhoods has increased over the past several decades, and the income achievement gap is driven in large part because of high-income children’s test scores. Therefore, my findings generally support the hypothesis that rising segregation in children’s contexts contributes to the rising income achievement gap.

My measure of income segregation between districts allows me to examine the association between children’s outcomes and test scores at various points of interest across the income distribution, including segregation of the poor. The data also allow for examination of segregation among all residents of a district, who are relevant for public school funding, and only households with school age children, who are relevant for school composition. Future results will thus provide a comprehensive portrait of the relationship between income segregation and the test scores of high- and low-income children.