Income volatility in adolescence and university enrollment: The case of South Korea

Abstract

This study examines the relationship between parental income volatility and children's university enrollment. It measures parental income instability using the following indicators: (1) transitory income volatility, (2) standard deviation of the arc percent change, and (3) coefficient of variation. These metrics are derived from the total household income data collected from the child's first year of middle school through the third year of high school. Additionally, this study investigates the impact of income trends by analyzing the regression coefficient obtained by regressing total household income against the father's age. An investigation of individuals born between 1986 and 1998, who graduated from general high school, reveals an negative correlation between parental income instability/trends and the likelihood of children enrolling in a 4‐year university. However, this correlation is only statistically significant for low‐income households. These findings imply that despite similar average income levels, households with high income volatility in the lower‐income group are less likely to make adequate educational investments in their children.