The Effect of Underclass Social Isolation on Schooling Choice

This paper models underclass social isolation as the loss of high‐income role models and then studies the plausible conjecture that this isolation depresses the level of schooling chosen by underclass youth. It is found that although this conjecture stands in roughly calibrated simulations, it is not a theoretical necessity. The paper also shows that the introduction of more representative role models during university can polarize underclass youth and that income support programs depress schooling choice through a distinct and reinforcing channel.