Permanent Income and the Black-White Test Score Gap

Jesse Rothstein and Nathan Wozny

Department of Economics, Working Paper Series from Department of Economics, Institute for Business and Economic Research, UC Berkeley

Abstract: Analysts often examine the black-white test score gap conditional on family income. Typically only a current income measure is available. We argue that the gap conditional on permanent income is of greater interest, and we describe a method for identifying this gap using an auxiliary data set to estimate the relationship between current and permanent income. Current income explains only about half as much of the black-white test score gap as does permanent income, and the remaining gap in math achievement among families with the same permanent income is only 0.2 to 0.3 standard deviations in the CNLSY and ECLS samples. When we add permanent income to the controls used by Fryer and Levitt (2006), the unexplained gap in 3rd grade shrinks below 0.15 SDs, less than half of what is found with their controls.

Keywords: Social; and; Behavioral; Sciences (search for similar items in EconPapers)
Date: 2011-03-01
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Permanent Income and the Black-White Test Score Gap (2011)
Working Paper: Permanent Income and the Black-White Test Score Gap (2011)
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