The Reproduction of Class Inequality: Relationships between
the Anglo-American Economic Model, Homeownership, and Higher Education

Herbert Hudson Taylor, IV
University of Maryland, College Park, Maryland


This paper identifies the Anglo-American economic model as one potential cause of class inequality and surveys the ways in which one’s class relates to one’s ability to own a home. These relationships establish a framework for the paper’s sociological question, which investigates how parental homeownership and several of its corollaries (i.e., its effects on one’s ability to afford opportunity, the quality of one’s communities, and one’s self-concept and self-esteem) influence children’s achievement of higher education. Thus, the paper ultimately attempts to explain the relationship between the Anglo-American economic model, America’s class inequality, and homeownership and the eventual impacts of these phenomena on children’s attainment of higher education. In this way, analyses comment on the cyclical functioning of class inequality under the Anglo-American economic model.

Introduction And Objectives

According to David Cho and Neil Irwin, staff writers of the Washington Post, Treasury Secretary Henry M. Paulson, Jr. recently detailed a new proposal presented by President George W. Bush’s administration to implement mortgage-relief for American citizens (D01). Cho and Irwin explained that this plan allows for local governments to assist struggling homeowners by refinancing their mortgages. Government officials and politicians seem to indisputably acknowledge that America is currently experiencing, what Cho and Irwin refer to as, a “mortgage crisis.” As legislators pursue comprehensive solutions to improve this crisis, they will most likely attempt to isolate its proximal causes (e.g., devastating increases in adjustable-rate loans) and render policies to mitigate its proximal consequences (e.g., foreclosure) (D01). Yet, as America’s government works to locate and address these immediate issues pertinent to homeownership, I seek to expand upon this mortgage crisis to understand a much larger picture of severe class inequality.

I chose to reference this complicated mortgage crisis in my paper’s introduction because it is one consequence of the institutional mechanisms producing class inequality in the United States. Furthermore, it invites considerations of the ways in which homeownership and class struggle are inextricably bound. In this paper, I intend to address a choice selection of these considerations by identifying the Anglo-American economic model as one potential cause of class inequality and by surveying the ways in which one’s class relates to one’s ability to own a home. I will point to these relationships in order to establish a framework for my larger sociological question, which aims to investigate how parental homeownership and several of its corollaries (i.e., its effects on one’s ability to afford opportunity, the quality of one’s communities, and one’s self-concept and self-esteem) influence children’s achievement in higher education. Thus, my ultimate objective in  this paper is to explain the relationship between the Anglo-American economic model, America’s class inequality, and homeownership and the eventual impacts of these phenomena on children’s attainment of higher education. In this way, I will use my analyses to comment on the cyclical functioning of class inequality under the Anglo-American economic model.

The Anglo-American Economic Model And Its Contributions To Class Inequality

Effects on Income Inequality
Although class inequality has many factors contributing to its production and reproduction, I intend to specifically focus on the contributions of the Anglo-American economic model to that inequality. Many scholars of economics and sociology contend that the Anglo-American economic model, despite its possible benefits to a society (e.g., low unemployment rates), often produces severe wealth inequality. In his article published in Good Governance, Democratic Societies and Globalisation, Luke Martell went as far as to contend that “an Anglo-American . . . economic model undermines goals such as equality . . . [and] the eradication of poverty” (92). One can reach this conclusion for a range of reasons. For instance, the Anglo-American regime is structured to give free-market capitalism more power and freedom by loosening the control and involvement of its government (Sennett 53). In this way, businesses and corporations have the ability to create a system that is constantly changing its structure, leading to a distinct disadvantage for citizens with less power and prominence in the workplace (Sennett 53).  That is, because this system is prone to change and is highly flexible, it can create increasing wage inequality (Sennet 54). For example, Harold R. Kerbo asserted that during the 1980’s “lower-income groups were losing income share while the top groups were making significant gains” (24). Likewise, in 2003, the lowest 20 percent of American households within the distribution of total U.S. income received merely 3.4 percent of U.S. income, while the highest 20 percent of households received 49.8 percent of the annual income in the United States (21). In his paper “Labor Market Institutions Around the World,” Richard B. Freeman explained how the Anglo-American model’s flexible labor force and low levels of governmental interference in the economy create poorer governmental oversight and social standards for workers as compared to other economic models. Through a detailed statistical analysis, Freeman concluded:

The US and the other Anglo-American countries (UK, Canada, Ireland, Australia, New Zealand) have weak employment protection legislation (EPL) compared to other advanced economies (Freeman, Boxall, and Haynes, 2007) . . . . The Anglo-American economy with the strongest EPL regulations, Australia, had weaker regulations than the European countries with the weakest protection, Denmark and Switzerland. The US, which operates in large part by employment-at-will has the lowest EPL score. In the US, firms own jobs and can replace workers for any business or other (non-discriminatory) reason. (7)

Consequently, we can understand that the Anglo-American regime not only contributes to wage inequity, but also allows for weaker employment protection.

Effects on Class Inequality
The wage and employment inequality that manifests within an Anglo-American economy translates into wealth and class inequality. Kerbo explained that “[i]ncome is certainly distributed in an unequal manner in the United Sates, but wealth is distributed even more unequally” (Kerbo 20). For example, if we consider the way in which stock options function in many Anglo-American economies, we can understand how the model allows wages and employment to determine collateral wealth and socio-economic class. For example, in 1995, 1 percent of Americans owned 51.4 percent of private corporate stock (Kerbo 155). In this way, high-income Americans retain massive control over corporate ownership. This contributes to a dramatically stratified class system; those gaining income develop the ability to own capital and thereby gain wealth, while those hurt by income inequality fall deeper into poverty and dependence.

Class Inequality, Homeownership, And Higher Education

Homeownership as a Primary Determinant of Class
The socio-economic stratification evident between the highly paid and well-invested “upper-echelon” of Anglo-American workers and their poorly-paid or unemployed brethren becomes especially apparent when considering the relationships between class and homeownership. In his article “A Room with a View or a Room of One's Own? Housing and Social Stratification,” Dalton Conley created a predictive model demonstrating the positive correlation between family income and homeownership in the United States. He explained the unique inter-relatedness between income, wealth, and homeownership by asserting that as income predicts homeownership, homeownership largely determines composite wealth and thereby socio-economic class. Conley stated that “homeownership is the modal form of wealth holding for American families” (272). In acknowledging the relationships between an individual’s income, home, and class, we can consider a plethora of other correlates. One of the most significant and widely studied is higher-education, particularly the correlation between parental homeownership and children’s educational attainment.

A Positive Correlation Between Homeownership and Higher Education
In her book, What Money Can't Buy: Family Income and Children's Life Chances, Susan E. Mayer contended that a child’s class and familial wealth is potentially the greatest determinant of his or her academic attainment (2-3).  She explained that a slight increase in a family’s wealth will, on average, increase its children’s educations by .02 to .11 years” (57).  Conley produced an even larger estimate of this effect in his article “Capital for College: Parental Assets and Postsecondary Schooling.” His findings showed that among sons and daughters of heads of households born in 1984, a doubling of their parents’ assets raised their years of overall schooling by .12 years and raised their years of post-secondary formal education by .11 years (68). His findings also suggested that doubling parental wealth, which is largely determined by homeownership, will raise a student’s likelihood of attending college by 8.3 percent and raise the graduation probability of a student already enrolled in college by 5.6 percent (68).  As we consider these findings and understand that homeownership is inextricably bound to class and wealth, we can explore the relationships between an individual’s prospects for higher education and his or her parents’ homeownership. In the latter sections of this paper, I plan to embark on that exploration by investigating several potential reasons why homeownership has such effects. To do so, I will largely rely on correlational and predictive research, which I concede does not allow us to determine causality. However, despite this potential shortcoming, the purpose of my investigation is to expose the existence of relationships between parental homeownership and children’s educational outcomes under the Anglo-American economic model and comment on how these relationships potentially contribute to a cycle of inequality.

The Effects Of Homeownership On The Attainment Of Higher Education

Education and the Power of Choice
One could easily suspect that a causal relationship exists between parental homeownership and a child’s educational prospects, as wealth surely affords access to better school systems, ability to pay for standardized testing assistance from corporations like Kaplan and the Princeton Review, and access to supplementary educational resources like the Sylvan Learning Center and national student conferences and seminars. In his book Linking Home and School, Ken Worpole confirmed that in the United Kingdom housing and education are inextricably bound precisely because of these sorts of factors. Worpole explained that educational attainment is achieved via a “greater freedom of choice,” and access to choice is attained via homeownership (29). He discussed the notion that the economic security associated with homeownership offers individuals tremendous choices with respect to where they will live, where their children will attend school, what extra-curricular opportunities they will afford for their children. This freedom of choice secures better academic prospects and positively correlates with children’s attainment of post-secondary degrees (29).

Similarly, Conley, in his article “Capital for College: Parental Assets and Postsecondary Schooling,” asserted that homeownership not only affords choices of where to live and what schools to send your children to but also affords choices of how to pay for college. The cost of an undergraduate college degree in the United States in astronomical. According to Mary Beth Pinto and Phylis M. Mansfield in their article on the financial risks of college students, 7 to 8 percent of bachelor’s degree recipients in 2004 experienced tremendous difficulty in repaying their educational debts and may ultimately defaulted or filed bankruptcy as a result (22-23). They also quoted financial experts who estimated that, in 2004, approximately one half of all college students had insurmountable financial burdens “with repayments exceeding 8% of their monthly incomes” (23). Conley explained that such a financial burden largely deters students from pursuing higher education, while any mitigation of that debt promotes academic pursuits. He further stated, “parents may use wealth—that is, property—to finance their children’s educational and professional credentials,” which, in the face of intractable student debt, unobstructs tremendous educational paths for children (68). Consequently, we can conclude that as parental homeownership alleviates a large majority of that financial burden, it thereby advances children’s attainment of college degrees.

Education and the Power of Community
In Nicolas Paul Retsinas and Eric S. Belsky’s book Low-Income Homeownership: Examining the Unexamined Goal, an article authored by William M. Rohe, Shannon Van Zandt, and George McCarthy suggested that the wealth accumulated through homeownership is not the only way parental homeownership affects children’s prospects of earning college degrees. Rohe et al. cited Boehm and Schlottman’s 1999 study, which provided statistical evidence from the Panel Study of Income Dynamics that even when average house value, parental education, parental income, and family size are controlled, homeownership is still a highly significant indicator of educational attainment (398). They demonstrated how this finding and others like it (e.g., Essen and his colleagues’ 1978 analyses of the National Child Development Study) demonstrated that homeownership affected higher education, even when many important confounding variables, especially parental income and home value, were controlled. These data have left researchers questioning how and why parental homeownership affects a student’s chances of pursuing an undergraduate diploma. Many have pointed to the importance of a student’s community or neighborhood on his or her academic successes. Thus, as we acknowledge the relationship between homeownership and community, we can again associate homeownership with a child’s educational outcome.

To do so, let us first consider Rohe et al.'s contentions regarding the links between homeownership and community. They hypothesized that because homeowners have great financial stake in the quality of their neighborhoods, they attend to antisocial behaviors of children and adolescents and thus promote their scholastic achievement (397). Furthermore, Rohe et al. explained that “[h]omeowners tend to stay longer in a neighborhood, making them more effective monitors of children in the neighborhood” (398). Worpole explained the importance of this community focus has on higher education. In his analysis of education and homeownership in the United Kingdom, Worpole found that that individuals actualize their potential best through strong communities that observe their youth, emphasize rights and responsibilities, and instill a sense of community relatedness and personal worth among their members (37). Thus, as homeownership encourages people to stay in communities for longer, it promotes this sort of tenor among a community. In entertaining both Rohe et al.’s views on the impact of homeownership on community and Worpole’s views on the relationship between community and education, we can ascertain that homeownership seems to create communities, which in their encouragement of neighborliness, interpersonal relatedness, and individual contributions, are more conducive to scholastic pursuits. In this way, we have located another potential explanation as to how and why parental homeownership materially affects children’s attainment of higher education.

Education and the Power of Self
In understanding that we should not reduce the impact of parental homeownership on children’s educational achievement to terms of parental wealth or income, we too should not conceptually limit this impact to terms of community quality. In fact, there are most likely many other intangible factors contributing to how parental homeownership influences children’s scholastic outcomes. One such factor is the way in which parental homeownership can affect a child’s sense of self.  Let us consider Conley’s discussion on this issue in his article “A Room with a View or a Room of One’s Own.” Conley noted that parental homeownership may transmit implicit messages to children regarding what sorts of actions and choices are most important and respectable. That is, households that buy their residences may suggest that one ought to defer gratification, work toward specific aspirations, and accumulate equity, rather than consume goods and pursue immediate gratification (267). In this way, Conley believed that students raised by homeowners may develop their self-concepts in relation to this value-framework. Similarly, in Social Class, Poverty and Education: Policy and Practice edited by Bruce Jesse Biddle, David L.Dubois expressed a similar notion. Dubois asserted that one’s academic success is contingent upon his or her resilience in an academic environment; he then went on to explain that such resilience may develop from “personal values and aspirations oriented toward success in important life domains” (133). Accordingly, if we consider that parental homeownership may transmit to children that academia is an “important life domain,” it thus promotes academic resilience in children. Therefore, in understanding Conley and Dubois’ assertions, we can ascertain that parental homeownership may foster a sort of future-orientation and academic resilience, which allow children to develop self-concepts and schemata that incline them toward higher education.

In his considerations of how one’s self-concept affects one’s academic attainment, Dubois explained that self-esteem and a sense of self-efficacy can be just as influential as one’s value system and goal-orientation. He provided case vignettes of students with varying family situations, self-concepts, and levels of academic achievement to expose the interrelated dynamics of the “aspects of the self.” He used these case studies to determine that self-esteem and feelings of competency are of primary importance to a person’s academic resilience and success (133-134). In order to appreciate this apparent relationship between self-esteem and academic outcomes in our investigation of parental homeownership, we must analyze empirical evidence supporting the idea that homeownership contributes to a person’s self-esteem.

Rohe et al. cited several empirical studies providing strong support for the effects of homeownership on developing a strong positive self concept.  For example, according to a study conducted by Balfour and Smith as part of a lease purchase program sponsored by the Cleveland Housing Network, merely providing an individual with the opportunity to own a home strongly elevates his or her self-esteem and sense of societal worth (386). Similarly, Rohe et al. referenced a qualitative study based on indepth-interviews, which concluded that “the mere fact of owning . . . property” influences how people see “evidence of their own success of failure in life” (386). Data from the National Survey of Families and Households in 1996 also reported that “homeowners were more likely to agree to the statement, ‘I do things as well as anyone,’” (386). One may conclude that these correlations could be due to an ideological value placed on homeownership in particular societies, which becomes translated through social messages and dominant precepts. As such, we can predict that children, as well as adults, are subject to positive associations of homeownership and similarly base their self-esteem, in part, on their statuses as the children of homeowners or non-homeowners. Furthermore, as mentioned earlier, Conley believed that given households transmit implicit messages about values and respectability to their children. If we consider this assertion in view of the above empirical research, we can hypothesize that the effect that homeownership has on a homeowner’s self-esteem and confidence may “trickle down” to the child in his or her household. That is, Rohe explained that homeowners adopt an intergenerational “homeowning ethic,” through which they take pride in and establish a sense of self-worth based on their status as homeowners (397). They then pass that ethic down to posterity and affirm to children that homeownership is commendable. In this way, children may develop their self-esteem and self-concept in light of their caretakers’ status as homeowners, which in consideration of Dubois’ findings, will positively impact their educational outcomes.

Conclusion: An Intergenerational Cycle

In concluding their analyses of the Panel Study of Income Dynamics, Boehm and Schlottman deduced that the primary channel by which children of homeowners benefit in society is their increased educational attainment (Rohe et al. 398). To render such a conclusion suggests that increased educational attainment provides a more valuable societal advantage than any other benefit associated with parental homeownership (e.g., collateral wealth, parental income, community). If we embrace Boehm and Schlottman’s contention, or at the very least acknowledge that educational achievement is an invaluable mechanism by which many individuals can begin to obtain fair salaries, purchase homes, and even transcend class lines, we can begin to understand the cyclical functioning of class inequality under the Anglo-American economic model.

As I have demonstrated in this analysis, class correlates with homeownership, homeownership correlates with education, and education correlates with class. Yet, the interrelatedness of this web of variables becomes even more complex as we consider the way in which it can be predicted by intergenerational models. For instance, Conley contended in his article for the journal, Sociology of Education, that socio-economic class status collapses across generations and as much as 80 percent of capital accumulation can be “attributed to intergenerational transfers” (60). He also explained that recent research on the role of family transfers within the distribution of wealth reveals a stronger correlation with intergenerational capital than income (60). Thus, as classes under the Anglo-American economic model construct themselves based on factors like wealth, property, and academic or professional qualifications, they intergenerationally reproduce and maintain themselves (Conley 68). In this fashion, class status is inherited and propagated. It is a legacy as well as a prospect.  Our efforts as members of an Anglo-American society must be toward ensuring that such a prospect is neither necessary nor unavoidable. We must work to assure that one’s class is never inexorably prescribed and that one’s attempts, abilities, or aspirations to transcend that class are never stifled by the muscle of institutionalized inequality.

Works Cited

Cho, David and Irwin, Neil.  “A Buffer? Or a Bailout? To Some Lawmakers, Bush's Mortgage Relief Is Too Weak a Patch to Protect Against a Growing Storm. Others Say It's Too Much” The Washington Post 7 December 2007: D01.

Conley, Dalton. “A Room with a View or a Room of One's Own? Housing and Social Stratification.” Sociological Forum 16.2 (2001): 263-280.

Conley, Dalton. “Capital for College: Parental Assets and Postsecondary Schooling.”   Sociology of Education 74.1 (January 2007): 59-72.

Dubois, David L. “Family Disadvantage, the Self, and Academic Achievement.”  Social Class, Poverty and Education: Policy and Practice. Ed. Bruce Jesse Biddle.  New York: Routlege Falmer, 2001. 133-175.

Freeman, Richard B.  “Labor Market Institutions Around the World.” National Bureau of Economic Research Working Paper13242.  July 2007.

Kerbo, Harold R.  Social Stratification and Inequality: Class Conflict in Historical, Comparative, and Global Perspective. 6th ed.  New York: McGraw-Hill Companies Inc., 2006.

Martell, Luke. “National Differences and the Rethinking of Social Democracies: Third Ways in Europe.” Good Governance, Democratic Societies and Globalisation.  By Surendra Munshi and Biju Paul Abraham.  New Dehli: Sage Publications Inc., 2004. 92-110.

Mayer, Susan W. What Money Can't Buy: Family Income and Children's Life Chances.  Cambridge, MA: Harvard University Press, 1997.

Pinto, Mary Beth  and Mansfield, Phylis M.  “Financially At-Risk College Students: An Exploratory Investigation of Student Loan Debt and Prioritization of Debt Repayment.”  NASFAA Journal of Student Financial Aid 36.2 (2006): 22-32.

Sennett, Richard. The Corrosion of Character: The Personal Consequences of Work in the New Capitalism. New York: W.W. Norton Company Inc., 1998.

Rohe, William M., Van Zandt, Shannon, and McCarthy, George.  “Social Benefits and Costs of Homeownership.” Low-Income Homeownership: Examining the Unexamined Goal.  Ed. Nicolas Paul Retsinas and Eric S. Belsky. Washington, DC: Brookings Institution Press, 2002.  381-406.

Worpole, Ken. Linking Home and School.  London: Demos, 2000.


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