Analyzing the Impact of Educational Attainment on Subpar Income Dynamics in Appalachia

This thesis analyzes the relationship between educational attainment and individual economic outcomes throughout the 420 counties of the Appalachian region of the United States. In doing so, this thesis seeks to better understand the impact of education on a region whose income dynamics have lagged significantly behind the rest of the United States for over a half-century. Initial analysis finds that Appalachian counties’ incomes per capita lag consistently behind the remainder of the United States, although they receive similar levels of supplementary income benefits. In general, educational attainment, income and income maintenance benefits have all risen over time across the region. Using fixed effects models for both region and time, this thesis finds an unequivocally positive relationship between all levels of educational attainment and per capita income at the county level. Additionally, these models find that an increase in bachelor’s degree attainment results in a greater increase in per capita income than an equal increase in high school diploma attainment; however, this difference is relatively small. Similar analysis of the impact of education on supplemental income benefits produced ambiguous results. While fixed effects models for region and time produced negative slope estimates, variance across models and higher standard errors make some of these results difficult to interpret. This ambiguity may be a result of a limited selection of data or significant variation in income maintenance benefits by county. Collectively, this thesis produces encouraging results for future research and policy analysis, finding that educational attainment has had a significant influence on individual earnings across the Appalachian region of the United States in the last half-century