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Journal Issue: Opportunity in America Volume 16 Number 2 Fall 2006

The Role of Higher Education in Social Mobility
Robert Haveman Timothy Smeeding

Introduction

Median income in 2000 for Americans with a bachelor's degree or higher was more than double that for high school graduates.1 By 2010, 42 percent of all new U.S. jobs are expected to require a postsecondary degree.2 Tomorrow, even more than today, postsecondary education will be among the most important determinants of labor market success, and therefore one of the nation's most crucial means of reducing persistent economic inequalities. President George W. Bush, among others, considers education a primary force for economic and social mobility in the United States. Indeed, during the second 2004 presidential debate, he cited it as the single most important means of improving mobility and leveling social and economic differences.

Traditionally, the nation's higher education system, especially its public component, has had two primary goals: economic efficiency and social equity. As to the first, without collective intervention in support of higher education, individuals by themselves are unlikely to invest sufficiently in postsecondary schooling, because they fail to take into account the social benefits that accrue to their added spending. Hence, a strictly market-based approach to postsecondary schooling would provide the nation's labor force with insufficient advanced skills and training. Society thus subsidizes postsecondary schooling in a variety of ways—through preferential loans, public provision, and below-cost tuition.

In addition to promoting economic efficiency, collective measures to support higher education have a second goal—to contribute to an “even start” for the nation's youth. The case for public provision of higher education and for public financial support to reduce the private costs of higher education (indeed, the case for public education in general) has long rested on the desire to reduce the connection between parents' social class and their children's economic position as adults.

However, despite past U.S. efforts to promote postsecondary schooling for youth from lower-income backgrounds, evidence is mounting that income-related gaps both in access to higher education and in college graduation rates are large and growing. About 85 percent of eighth-grade students in the United States aspire to a college degree.3 But in 2001, only 44 percent of high school graduates from the bottom quintile of the income distribution were enrolled in college in the October after they graduated from high school, as against almost 80 percent of those in the upper quintile.4 Thomas Kane reports that even among students with similar test scores and class ranks and from identical schools, students from higher-income families are significantly more likely than those from lower-income families to attend college, particularly four-year colleges.5 Indeed, since the 1970s students from lower-income families have increasingly become clustered in public two-year postsecondary institutions, which often turn out to be the end of their formal education.6

These disparities in college access lead to widening gaps in the share of students remaining in college until graduation. Of eighth graders surveyed in the National Education Longitudinal Study (NELS) of 1988 conducted by the Department of Education, 51 percent from the highest socioeconomic quartile reported having a bachelor's degree twelve years later, as against only 7 percent of those from the lowest quartile.7 Melanie Corrigan reports that 59 percent of low-income students who began postsecondary education in 1998 had a degree or were still in school three years later, as against 75 percent of higher-income students.8 Students from lowincome families are less likely than students from high-income families to estimate accurately the cost of college, more likely to take remedial courses in college, and less likely to understand the college application process, in part because their parents did not attend college themselves and in part because their high schools, which send few students on to four-year baccalaureate degrees, lack useful and timely advice on college preparation.9