Exposure to Inequality, Human Capital Investment, and Labor Market Outcomes
(2025) In IZA Discussion Papers- Abstract
- We estimate the effects of exposure to income and wealth inequality during adolescence on long-term educational and labor market outcomes. Using detailed Swedish register data covering all students completing compulsory education between 1989 and 2013, we construct measures of inequality among students’ school-cohort peers and exploit variation between cohorts within schools to identify causal effects of inequality exposure. We find no evidence that exposure to inequality affects GPA, high school graduation, university enrollment, university completion, or income up to age 35. These null results are precisely estimated and robust to alternative measures of inequality, sample definitions, and specifications. Moreover, we find no evidence of... (More)
- We estimate the effects of exposure to income and wealth inequality during adolescence on long-term educational and labor market outcomes. Using detailed Swedish register data covering all students completing compulsory education between 1989 and 2013, we construct measures of inequality among students’ school-cohort peers and exploit variation between cohorts within schools to identify causal effects of inequality exposure. We find no evidence that exposure to inequality affects GPA, high school graduation, university enrollment, university completion, or income up to age 35. These null results are precisely estimated and robust to alternative measures of inequality, sample definitions, and specifications. Moreover, we find no evidence of systematic heterogeneity by socioeconomic background. Taken together, these findings suggest that school integration policies mixing students from different socioeconomic backgrounds do not necessarily carry hidden long-run costs stemming from exposure to inequality. More broadly, they challenge the view that school-based exposure to peer inequality during adolescence is a causal driver of human capital accumulation or later-life mobility. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/05d787c9-80b3-40d7-9e9f-a3dde3ef2245
- author
- Bietenbeck, Jan LU ; Collins, Matthew LU ; Lundborg, Petter LU and Majlesi, Kaveh LU
- organization
- publishing date
- 2025
- type
- Working paper/Preprint
- publication status
- published
- subject
- in
- IZA Discussion Papers
- issue
- 18289
- ISSN
- 2365-9793
- language
- English
- LU publication?
- yes
- id
- 05d787c9-80b3-40d7-9e9f-a3dde3ef2245
- alternative location
- https://docs.iza.org/dp18289.pdf
- date added to LUP
- 2026-03-06 08:55:15
- date last changed
- 2026-03-06 14:10:04
@misc{05d787c9-80b3-40d7-9e9f-a3dde3ef2245,
abstract = {{We estimate the effects of exposure to income and wealth inequality during adolescence on long-term educational and labor market outcomes. Using detailed Swedish register data covering all students completing compulsory education between 1989 and 2013, we construct measures of inequality among students’ school-cohort peers and exploit variation between cohorts within schools to identify causal effects of inequality exposure. We find no evidence that exposure to inequality affects GPA, high school graduation, university enrollment, university completion, or income up to age 35. These null results are precisely estimated and robust to alternative measures of inequality, sample definitions, and specifications. Moreover, we find no evidence of systematic heterogeneity by socioeconomic background. Taken together, these findings suggest that school integration policies mixing students from different socioeconomic backgrounds do not necessarily carry hidden long-run costs stemming from exposure to inequality. More broadly, they challenge the view that school-based exposure to peer inequality during adolescence is a causal driver of human capital accumulation or later-life mobility.}},
author = {{Bietenbeck, Jan and Collins, Matthew and Lundborg, Petter and Majlesi, Kaveh}},
issn = {{2365-9793}},
language = {{eng}},
note = {{Working Paper}},
number = {{18289}},
series = {{IZA Discussion Papers}},
title = {{Exposure to Inequality, Human Capital Investment, and Labor Market Outcomes}},
url = {{https://docs.iza.org/dp18289.pdf}},
year = {{2025}},
}