Abstract
This study explores the conversion of cultural capital into economic capital, and specifically financial capital in the form of parental financial planning for children’s college education, including reported financial preparations and savings. Using data from the Education Longitudinal Study (ELS:2002), logistic regression-based analyses of aspects of cultural capital indicated that parental involvement exhibited the most prevalent relationship with financial planning and the amount saved, and that parents’ expectations, but not their aspirations, corresponded to engagement in financial planning. Findings support the conclusion that some parents convert part of their cultural capital to financial capital in preparation for paying for their child’s college education, perhaps representing a typically hidden facet of social class reproduction.
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Notes
Such plans include Coverdell Education Savings Accounts (ESAs, previously called Education IRAs) and Qualified Tuition Programs (QTPs) authorized by Sect. 529 of the Internal Revenue Code. With these 529 plans, the US federal government allows individual states to create tax-advantaged programs to encourage parents to save money toward their child’s college education. These programs can either be general college savings plans intended for use wherever the child goes or prepaid tuition plans tied to specific institutions.
There have been warnings against superficial quantitative operationalization of social and cultural capital (Smart 2005), which we acknowledge and seek to avoid.
Although Martin and Spenner (2009) note: “Bourdieu considers the academic skills, values and abilities that we regard as dimensions of human capital as examples of embodied cultural capital” (p. 626), we chose to consider parental and grandparental education as human capital, including them as controls (Becker 1993; Coleman 1988). This allows us to argue clearly for a conversion of capital without appealing to these variables, which economists might consider differently than sociologists.
Results of all analyses using multiple imputation when restricting the sample to cases where parents completed a survey (not presented) are substantively similar to those reported here for the entire 10th grade cohort. This reinforces the assumption that these missing parent data are either missing completely at random (MCAR) or missing at random (MAR) and can reasonably be imputed. For ease of interpretability, we present results for the full 10th grade cohort.
Given that including income in a separate model block with the cultural capital variables but without the other controls (results not presented) rarely substantially changed the resulting relationship between a cultural capital variable and our outcomes of interest, we present income in our control block for all analyses.
A comparison of results using multiple imputation and listwise deletion showed a reasonably good correspondence overall, although there were some differences. In particular, for the cultural capital variables, differences included parental expectations (for 3 out of 15 models) and parental home involvement (1 out of 15). The factors showing the most differences overall were private school (5 out of 15) and the number of kids (4 out of 15).
We conducted several alternate analyses for the amount saved to test the sensitivity of our results to the analysis model chosen. Ordinary least squares models for a pseudo-continuous amount saved variable, which likely violate the assumption of normality of errors due to the large number of zero values, produced results very similar in nature to the multinomial models presented, with only a few exceptions (e.g., attending private school was significant and parent age was not; R2 = 0.30). Given that the amount saved was collected as a categorical response set, we also considered ordered logistic regression. However, this specification failed the parallel regression assumption (via a Brant test) on which ordinal models rely (Long 1997). Multinomial logistic regression on all eight original categories did produce slightly more nuanced findings (e.g., particularly for parents who do not work and high school type), but the added complexity would not add substantially to the interpretation of our primary findings, and so we present more concise three-category results.
This may be an aberration though, as the sharp rise in home equity-based borrowing beginning in 2002 and lasting until 2006 that appears to be associated with the subsequent economic downturn may partially explain this result (Mian and Sufi 2009).
The condensed information in Table 4 relevant for this study should be used in conjunction with the complete regression results to get a full understanding of the relationships between the variables. These results, as well as additional information about the variables themselves may be found in a supplemental file available from the authors upon request or from the website https://works.bepress.com/ryan_wells/36/.
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Acknowledgements
The authors wish to thank Robert Gable, Gary Malaney, Greg Wolniak, and Jessica Wolpaw for helpful comments on early drafts of this paper, although of course, any errors or omissions in the final paper are solely the responsibility of the authors.
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Manly, C.A., Wells, R.S. & Bettencourt, G.M. Financial Planning for College: Parental Preparation and Capital Conversion. J Fam Econ Iss 38, 421–438 (2017). https://doi.org/10.1007/s10834-016-9517-0
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DOI: https://doi.org/10.1007/s10834-016-9517-0