Parents’ Low Education Leads to Low Income, Despite Full-Time Employment

This fact sheet includes children who live apart from both parents (for example, foster children or children being raised by grandparents). Previous versions of this fact sheet counted children living apart from parents differently; therefore, comparisons with versions published prior to September 2006 are not valid.

Higher education is one of the most effective ways that parents can raise their families’ incomes. There is clear evidence that higher educational attainment is associated with higher earnings. Over the past two decades, parents with less education have been losing economic ground. Policies that support education for low-income parents and children offer them the potential for lasting economic security.

Most children in low-income families 1 have parents without any college education. 2

• 26% of children in low-income families—over 7.2 million—have parents with less than a high school diploma.
• 36%—almost 10.2 million—have parents with a high school diploma, but no college education.
• 39%—over 10.9 million—have parents who have at least some college education or more.

Higher education leads to higher earnings.

• 82% of children whose parents have less than a high school diploma live in low-income families.
• 56% of children whose parents have a high school diploma, but no college education, live in low-income families.
• Only 24% of children whose parents have some college education or more live in low-income families.

If parents have low education levels, full-time employment does not protect their families from low earnings.

Among children whose parents work full-time and year-round:

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Figure 1: Low-income children with parents employed full-time, by parents’ education, 2005

• 74% of children whose parents have less than a high school diploma live in low-income families.
• 45% of children whose parents have a high school diploma, but no college education, live in low-income families.
• Only 16% of children whose parents have some college education or more live in low-income families.

Parents with less education are losing economic ground.

Over the past two decades, children with parents employed full-time are increasingly likely to be low income if their parents do not have at least a college education. Among children whose parents work full-time and year-round:

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Figure 2: Low-income children with parents employed full-time, by parents’ education, 1985-2005

• The percent of children in low-income families increased from 64% to 74% if parents had less than a high school diploma.
• The percent of children in low-income families increased from 36% to 45% if parents had a high school diploma, but no college.
• The percent of children in low-income families remains unchanged at 16% if parents had some college education or more.

Policy Implications

Federal and state policies offer opportunities to make higher education more accessible to low-income parents.

• Increase access to financial aid for low-income students. Over the past decade, federal resources for higher education have primarily benefited higher-income families. 3 Recent federal policies have favored tax subsidies over traditional subsidized loans and grants. Reversing this trend and reducing financial barriers to schooling will increase access to higher education for low-income parents.
• Help low-income parents who are enrolled in higher education with child care costs. Many states do not provide subsidies for parents who are pursuing higher education. Increasing funds for child care subsidies and expanding eligibility criteria helps parents who need affordable, stable arrangements for their children while they are in school.
• Head Start can promote the pursuit of higher education among the next generation of parents. Low-income children who attend Head Start are more likely to graduate from high school and attend college. 4 Protecting the funding and high standards of Head Start will ensure that more low-income children are able to pursue higher education—and the economic security that comes with it.