This paper is an empirical exploration of the effects of a variety of family and economic circumstances experienced during childhood on one indicator of success in young adulthood--high school completion. The estimates suggest that parental education and mother's work are positive and significant determinants of high school completion, whereas growing up in a family with more children (who compete for resources), being persistently poor and on welfare, and moving one's residence as a child have significant negative impacts on high school completion. The effects of some family stress and economic events differ depending on the age of the child when they occur. The results support the economic model of investment in children, as well as the welfare culture and socialization models.

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Most Americans expect the nation's colleges and universities to promote the goal of social mobility to make it possible for anyone with ability and motivation to succeed. But according to Robert Haveman and Timothy Smeeding, income-related gaps both in access to and in success in higher education are large and growing. In the top-tier colleges and universities, almost three-quarters of the entering class is from the highest socioeconomic quartile. The pool of qualified youth is far greater than the number admitted and enrolled; hence America's top colleges could enroll more moderate- and low-income students without lowering their selection standards. Higher-income parents make enormous efforts to ensure their children's academic success, while children of poor parents begin the "college education game" later and with fewer resources. Students in poor and minority neighborhoods are less well prepared academically; ill prepared to select colleges, apply for admission, and secure acceptance; and poorly informed about the cost of attending college and the availability of needs-based financial aid. Sharply rising college prices during the 1980s and 1990s, together with the growing inequality of family income, have raised the cost of attending college far more for low-income students than for well-to-do students. Financial aid has risen more slowly, and the share targeted on low-income students has been falling. The authors offer bold policy recommendations to increase educational opportunities for low- and middle-income students. These involve the development of financing structures that will increase access for students from lower-income families. Public institutions could price tuition close to real costs and use added revenues to provide direct student aid for students from low-income families. Federal subsidies to students who attend wealthy institutions could be capped, with the savings redirected to students attending less well-endowed schools, both public and private. Finally, federal and state governments could redirect to lower-income students the financial support they now provide colleges and universities.

Estimates of neighborhood effects on children's outcomes vary widely

American prosperity in the second half of the 1980s together with the booming economy of the 1990s created the impression that American households have done well, particularly in terms of wealth acquisition. In this paper, we develop the concept of "asset poverty" as a measure of economic hardship, distinct from and complementary to the more commonly used concept of "income poverty." We define a household with insufficient assets to enable it to meet basic needs (as measured by the income poverty line) for a period of three months to be asset poor. The results reveal that in the face of the large growth in overall assets in the U.S. and a fall in standard income poverty over the period from 1983 to 2001, the level of asset poverty increased from 22.4 to 24.5 percent. We also find that asset poverty rates for blacks and Hispanics are over twice those for whites; that asset poverty rates fall monotonically with both age and education; that they are much higher for renters than homeowners; and that by family type they range from a low of 5 percent for elderly couples to 71 percent for female single parents.