A clear gap was found in the probability of a high school student obtaining a bachelor's degree between those whose parents are in the upper three fifths of the income distribution and those with similar matriculation achievements but whose parents fall

1.7.2007

New research in the Bank of Israel:
A clear gap was found in the probability of a high school student obtaining a bachelor's degree between those whose parents are in the upper three fifths of the income distribution and those with similar matriculation achievements but whose parents fall in the lower quintile

	Part of the difference in probability reflects efforts to achieve a social status;
	difficulties in financing the studies were found
	in a relatively small sector of the population
	The views expressed in this paper do not necessarily reflect those of the Bank of Israel

The Bank of Israel today published a new study by Yoav Friedman of the Research Department, in which the author finds a clear difference in the probability of obtaining a bachelor's degree between students whose parents are in one of the highest quintiles of income distribution, compared to those with similar matriculation achievements, but whose parents are in the lowest fifth of income distribution. This difference ranges in many cases by 10 percentage points and occasionally even more. The gap reflects a combination of several factors, among them, on the one hand, financial difficulties that affects the probability of students coming from lower socioeconomic backgrounds pursuing tertiary education, and on the other hand, the effort to achieve a social status, which spurs students in the stronger population sector to go on to academic studies.

This research is part of the Economics of Higher Education (EHE) project, initiated by the Samuel Neaman Institute, Technion, together with the Sapir Forum of the Hebrew University, Jerusalem, and Tel Aviv University, and is based on the academic achievements of twelfth grade students in 1992 and 1992 during a period of 10 years after graduating from high school. In that period, tuition fees at university were some 30 percent higher in real terms than they are today, after partially implementing the Winograd Report.

Among female students, more than 60 percent of those who matriculated in 1992 and whose parents belonged to the top quintile had completed a bachelor's degree by 2002, compared to fewer than 20 percent of those female students who had matriculated at

the same time, but whose parents were from the bottom quintile. Among the male students, the gap was slightly smaller and stood at around 35 percentage points. Most of the difference stemmed from gaps in educational achievements that began and widened throughout the childhood and teenage years of the students, while the family income at the time of high school matriculation explained less than 20 percent of the gap.

Furthermore, the research shows that this difference in probability of obtaining a bachelor's degree being attributable to the parents' liquidity constraints was dependent on the quality of the students' matriculation results: among those who matriculated in the academic track, only those students whose parents were from the bottom socioeconomic quintile suffered a lower probability of obtaining a bachelor's degree.

In contrast, among those students who left high school with no matriculation certificate, it was found that the link between their parents' income and the chances of completing a bachelor's degree was stronger, and expresses, as mentioned earlier, factors such as environmental influences and the efforts to achieve a social status, which encourage students among the stronger population group to pursue further education.

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