Effects of Household Income on Graduation Level Across US Counties

Abstract

This paper analyzes the effect of household income on the graduation level on a county scale across the United States, following the hypothesis that household income should have a positive impact on graduation rates, measured in the percentage of people ages 18 to 24 with at least a high school degree as the dependent variable. Data from the 2010 US Census is used to estimate simple and multiple regression models. Other independent variables used are teen birth rate, average household size, poverty level, percent of people 25 and older with at least a high school degree, urban/rural location type, logarithm of household income, and percent of people ages 45 to 64 with at least a high school degree to take into account family history and regional differences and reduce omitted variable bias. The simple regression shows a positive relation between graduation rate and household income. The multiple regressions show that most independent variables have the hypothesized relation with the dependent variable, but fail to pr ovide conclusive evidence about the hypothesis.