Income Differences in Education: the Gap Within the Gap

The Issue:

Students from poor families tend to score much lower on academic tests than their better-off peers. The achievement gap has grown over time: it is wider today than it was 25 years ago. This is particularly worrisome because test scores are early indications of whether a child will go on to attend college and of their level of income in adulthood. Moreover, it is likely that the gap in academic achievement between the poorest students and those at the top of the income distribution is greater than many studies estimate. Lacking access to student income information, researchers and policy makers use a very crude yardstick to measure economic disadvantage. This makes it harder to ascertain the true extent of the gap and, more importantly, more difficult to target resources to those who need them the most.

It is likely that the gap in academic achievement between the poorest students and those at the top of the income distribution is larger than many studies estimate.

The Facts:

• The gaps in student achievement between high- and low-income children have been growing. For instance, Sean Reardon finds that the difference in standardized math and reading test scores between rich and poor students is 40 percent greater today than it was three decades ago. The difference in test scores by income is much larger than the differences in scores between black and white students. Although there is some evidence that differences in school readiness by income in kindergarten narrowed lately, the gap between rich and poor students remains large. Lower educational attainment is associated with poor labor force prospects. Over the past several decades, workers without a college education have faced diminishing employment prospects and stagnant or declining wages. (See this EconoFact memo for educational attainment and earnings.)
• Student eligibility for free or reduced-price lunch is a widely used measure for poverty in schools, even though it offers a very broad brushstroke. While nearly half of students nationwide are eligible for subsidized meals, only a quarter of U.S. children live in poverty. Children in households with income below 185 percent of the federal poverty line are eligible for subsidized meals in school (those below 130 percent are eligible for free lunch). In 2015, a family of four had to have annual earnings below $31,525 in order to qualify for free meals and below $44,863 to qualify for reduced-price meals.
• There is wide variation in test scores within the group of students who qualify for subsidized meals. Looking at the number of years that a child is eligible for free or reduced-price lunch gives a better measure of the depth of economic disadvantage. In our research we find that in Michigan about half of 8th graders are currently eligible for a subsidized meal. In 8th grade math tests they score 0.69 standard deviations behind classmates who did not qualify for subsidized meals in 8th grade (this translates to scoring roughly 2 grades behind). While half of students receive subsidized meals in 8th grade, 14 percent of those students have been eligible for subsidized meals every year since kindergarten. The children who have been persistently disadvantaged since kindergarten score 0.94 standard deviations behind those who have never been eligible — about 3 grades behind. Children in the most disadvantaged group were more likely to be black or Hispanic and live in urban areas. But the differences in academic scores for the most disadvantaged persisted even after taking into account characteristics such as race, ethnicity, and gender, as well as the schools the students attend.
• The larger achievement gap for the most disadvantaged students is already present at the early stages of children's schooling. When we looked at 3rd grade test scores, the students who belonged to the most disadvantaged group (those who would qualify for subsidized meals every year through 8th grade) were already scoring 0.84 standard deviations lower than children who would never qualify for subsidized meals. This means that although the gap in test scores continues to widen as children progress through school, 90 percent of the gap is already present by 3rd grade.
• Schools and even classrooms with identical shares of students receiving subsidized meals may differ widely in the share of their student populations that is most deeply and persistently disadvantaged. In many states there are many schools where all students qualify for subsidized meals. While their economic characteristics may look superficially similar, these percentages can mask important differences in their economic makeup. We find that the share of students who qualify for subsidized meals every single year between kindergarten and 8th grade ranges from 18 to 86 percent among Michigan schools where all 8th graders currently receive subsidized meals.
• Many federal, state, and local programs distribute money based on the share of a school's or a district's students eligible for subsidized meals. For instance, local education agencies use information about eligibility for subsidized meals to allocate Title 1 funds, which subsidize the schooling of low-income children.