Literature Review 2: The Price of Inequality

2) MLA Citation:

Stiglitz, Joseph E. The Price of Inequality. New York: W W Norton, 2013. Print.

3) Summary:

In The Price of Inequality, economist Joseph Stiglitz highlights not only the accelerating financial inequality currently taking place in America, but poses an agenda to help reconcile the situation.  Overall, he contends the 1%, and at an even greater level the .1%, have been experiencing increasing returns in capital gains while the middle class has stagnated and, in some respects, been diminished.  The economist makes a point to completely denounce trickle down economics and the thought process that gains at the highest income levels will result in gains to the rest of the population.   However, in the long run, he suggests that this type of economy is unsustainable and will lead to detrimental effects.  He suggests that America has become a two-tier society, with the haves and the have-nots, that has come as a result of political power and legislation.  Only with legislation reform will this trend cease and the monetary gains of the few at the detriment of the majority reverse.

4) Author:  
Joseph Stiglitz is American award-winning economist, professor at Columbia University, and acclaimed author.  He received the Nobel Memorial Prize in Economic Sciences in 2001 and the John Bates Clark Medal in 1979.  In addition to working with the famed economist Robert Solow, he served as senior vice president and chief economist of World Bank and as the 17th Chair of the Council of Economic Advisors during Bill Clinton's presidency.  Obviously, his resume speaks for itself; there might not be a more equipped human to speak on the effects of inequality than him.

5) Key Terms:

Trickle-down eeconomics: This is an argument, perpetuated by politicians and the wealthy, that more financial gains at the top will result in a "trickle down" effect due to growth and the lower income levels will experience gains as well.  However, Stiglitz denounces this assumption and notes, "What America has been experiencing in recent years is the opposite of trickle-down economics: the riches accruing to the top have come at the expense of those down below."

Deregulation: The author defines regulation as "the rules of the game that are designed to make our system work better— to ensure competition, to prevent abuses, to protect those who cannot protect themselves."  Deregulation, is obviously the absence of these necessary precautions.  And without these regulations firms can act in a manner that benefits the few rather than the majority.  I believe this concept is applicable for not only the financial sector as Stiglitz suggests, but also with privatization of higher education.

6) Quotes: (page numbers not available right now as I am reading on a kindle)

"Poor kids who succeed academically are less likely to graduate from college than richer kids who do worse in school.  Even if they graduate from college, the children of the poor are still worse-off than low-achieving children of the rich"

"A stark reflection of the inequality of educational opportunity in our society is the composition of students in America’s highly selective colleges. Only around 9 percent come from the bottom half of the population, while 74 percent come from the top quarter."

"Part of the reason for this is that much of America’s inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others."

7) Value:

The book is so incredibly rich with content.  I could honestly use this in every single one of my body paragraphs if necessary; I see this as my secret weapon.  There is no limit to which the contents of the book could not relate to my essay.

Research Blog #5: Works Cited Page

Works Cited

Alon, Sigal. "Model Mis-Specification In Assessing The Impact of Financial Aid on Academic Outcomes." Research in Higher Education 46.1 (2005): 109-25. Print.

Armstrong, Elizabeth A., and Laura T. Hamilton. Paying for the Party: How College Maintains Inequality. N.p.: Harvard UP, 2013. Print.

Dynarski, Susan. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance." National Tax Journal 53.3 (2000): 629-61. Print.

Goldrick-Rab, Sara, Douglas N. Harris, and Philip A. Trostel. "Why Financial Aid Matters (or Does Not) for College Success: Toward a New Interdisciplinary Perspective." Higher Education: Handbook of Theory and Research 24 (2009): 1-45. Print.

Stiglitz, Joseph E. The Price of Inequality: How Today's Divided Society Endangers Our Future. New York: W.W. Norton &, 2012. Print. 

Research Blog #4: Research Proposal

Effects of Socioeconomic Status and Financial Aid on College Completion and Success

Topic

It is generally accepted that in today’s economy, a college degree is a necessity for young adults to acquire a worthwhile career.  However, the path taken by student’s towards a college degree has changed significantly over the past few decades.   Most notably, the rise of financial aid as a driving force for college enrollment has changed the outlook amongst campuses across America.  As inspired by Paying for the Party, the college experience seems to be unique for each individual, largely based upon their financial background.  As a result, students enjoy varying levels of success both during their collegiate years as well as post-graduation.  The financial factors, which would include parents’ annual income, financial aid received, and the necessity, or lack there of, of employment during the school week, all play a role in the academic success of the individual.  These may play a part initially, as represented in enrollment rates, during college years, as shown by completion rates and GPAs, or post-graduation, as students career opportunities.  

Research Questions

Does socioeconomic status affect students’ college success which perpetuates, and even escalates, inequality in America? For this paper’s purposes socioeconomic factors will include but are not limited to, parents’ salary, financial aid, and in-college employment, and college success will be represented by university enrollment, degree-completion, academic performance, and post-college career prospects.

Theoretical Frame

To attempt to answer this question, I must define why students from lower socioeconomic backgrounds may enjoy a distinctly different experience during collegiate years than their more affluent counterparts.  The first theory in which to explore is the Human Capital theory, which states that humans behave rationally and are well informed about their choices.  Students from lower economic backgrounds may find that if their parents did not attend college themselves, their ability to navigate the enrollment process may be much more difficult.  The understanding of financial aid, the ability to identify the real cost of a college education, and the perceived value of having a college degree, may be far lower in students from the lower financial brackets and may prove to be a limiting factor in their decisions.  

Furthermore, it is important explore theories on time management and how socioeconomic factors affect how students utilize their time.  Depending on if students choose to apply their time to studying, partying, or outside employment, they may experience varying levels of academic success.  It is important to find trends correlated with socioeconomic status the management of time to accurately assess these effects.

In addition, career prospects post college have become increasingly more important with the rise of student loans.  Students’ must repay their loans immediately upon graduation, and they may hamper the ability of students to efficiently find relevant employment based on their college degree.  Students from lower socioeconomic classes may find an inability to accurately perform a lengthy job search as compared to their richer cohorts, resulting in underemployment.  

Research Plan, Case or Additional Questions

There are a wide varieties of topics that fall under this particular topic, and luckily, there are many scholarly journals that relate to it.  To effectively answer the posed research question, an extensive amount of literature must be consulted.  As is, the research question includes many facets, and can still be expanded.  It will be essential to clearly define each aspect of the question, including socioeconomic status, college success, and perceived inequality.  The question may be too broad to answer as is, but until enough research has been sifted through, it cannot be refined.

It is necessary for factual, statistical evidence be proposed throughout the paper to ensure empirical evidence supports the theories of the author.  Merely, anecdotal evidence would not suffice for a monetary based argument.  Therefore, the paper should include a strong mathematical graphs and charts that suppor the theories proposed.  

Literature Review Blog #1

2) MLA Citation:

Goldrick-Rab, Sara, Douglas N. Harris, and Philip A. Trostel. "Why Financial Aid Matters (or Does Not)          for College Success: Toward a New Interdisciplinary Perspective." Higher Education: Handbook of

Theory and Research 24 (2009): 1-45. Print.

(I cant get this to indent properly, and it is very frustrating.)

3) Summary:

As the title of the article suggests, the author's set out to find a measurable answer on whether financial aid positively or negatively affects students success during and after college.  In their introduction, they displayed a multitude of questions that they intended to answer during their study.  For example, not only did they want to know if aid affects success, but also through what mechanisms, and if the effects are largely direct or indirect from the causes.  Furthermore, they wanted to know if, in theory, financial aid should affect success. They initiated an empirical test applied to the human capital theory and the sociological and psychological explanations of success.  From their findings, the researchers found that under the human capital theory initially, more aid leads to increased level of enrollment, however, "there is considerably less evidence regarding the direct impact of aid on college completion, even though retention is an explicit goal of federal aid programs".  Furthermore, they stated that in terms of persistence, need based grants are more important than loans.  Finally, the researchers very briefly touched upon students' transition to adulthood and the effects of financial aid on this process. 

4) Author:

Sara Goldrick-Rab is associate professor of educational policy studies and sociology at the University of Wisconsin at Madison.  Her research is directed at policies that deal with reducing socioeconomic and racial inequalities.  Not only has she been published in multiple scholarly journals, she is also the co-author of Putting Poor People to Work: How the Work-First Idea Eroded College Access the Poor.  

Douglas N. Harris is an Associate Professor of Economics at Tulane University and the University Endowed Chair in Public Education.  According to the National Education Policy Center, "His research interests include achievement gaps and inequities, teacher quality, accountability, school finance, and the relationship between education and economic competitiveness." 

5) Key Terms:

Human Capital Theory: this model is the assumption that humans behave "rationally and are well informed about their choices."  The authors intended on using this as the main theory being tested empirically.

Financial Nexus theory: "the ability of financial aid to affect decisions the decisions made by college students depends on the availability of aid and student perceptions of college costs"

6) Quotes:

"A simple correlation between aid receipt and college success is likely to be negative because students from low income faimiles, in the absence of aid, are for a variety of reasons, less likely to succeed" (Goldrick, 2).

"Researchers have had great difficulty identifying causal effects of aid on college completion because there are many reason to expect poor students to have lower rates of entry and persistence  -- from lower levels of paretnal education to inferior elementary and secondary school prepartion" (Goldrick , 9)

"The prediction of the human captial theory - that more aid leads to increased college entry and completion - is generally supported by empirical evidence." (Goldrick, 11)

7) Value:

This particular article proposes great value towards my final paper, as it provides an empirical model that supports theories that I plan on researching.  The theories discussed are completely relevant, and they should be brought up within my personal paper.  In fact, the financial nexus theory and can be further expanded on a macroeconomic level in asses post college success. Furthermore. The human capital theory directly relates to the ability of students to assess their decision on whether or not to attend college, which will be directly mentioned in my research.  

Research Blog #3: Privatization and My Topic

The privatization of college has vastly changed the financial outlook for college students after graduation.  Privatization has led to changes in the student aid package, most notably an increase in the amount of student loans given out to offset the rising tuition rates.  As noted in the National Education Association's report, “loans have increased as an overall share of the student aid package, which can serve to make students acutely aware of the need for immediate employment upon graduation to pay them back” (NEA 4).  The addition of student loans affects students from lower socioeconomic brackets as they have the least amount of money to pay for school.  Lower and middle class students will then have thousands of dollars in loans to repay upon graduation, unlike their counterparts from more affluent families.  This perpetuates financial disparity.

Scouting the Territory

After a short brainstorming session, I have decided to continue with my original topic idea.  Professor Goeller was kind enough to recommend a few useful resources that I have briefly looked into.  In that same respect, I like his idea of looking more closely on post-graduation success.  I vaguely remember Malcolm Gladwell's Outliers, one of my favorite books,  briefly touching on that subject as well as the suggested The Chosen by Jerome Karabell.

After combing Google for potential resources, I think there is ample amount of research being done on the topic to support a well put together essay.  Although not directly relating to my topic I think Nate Silver's blog with the New York Times could provide statistical research that would be of interest.  In addition, the American Psychological Society has published a few facts that could be interesting as well.

There is a plethora of scholarly articles being published on the effects of socioeconomic status on education, intelligence, and success.  These are easily accessible via Google Scholar.  The first article I skimmed through was an article published in "Sociology of Education" entitled Socioeconomic Status, Intelligence and the Attainment of Higher Education. This is just the tip of the iceberg of the studies that are being published on the subject.

I feel confident with my ability to pursue research in this topic and continue to develop ideas around it.