Thirteen Economic Facts about Social Mobility and the Role of Education

http://www.brookings.edu/research/reports/2013/06/13-facts-higher-education

The Hamilton Project

Report | June 2013

Thirteen Economic Facts about Social Mobility and the Role of Education

By: Michael Greenstone, Adam Looney, Jeremy Patashnik, and Muxin Yu, The Hamilton Project

This Hamilton Project policy memo provides thirteen economic facts on the growth of income inequality and its relationship to social mobility in America; on the growing divide in educational opportunities and outcomes for high- and low-income students; and on the pivotal role education can play in increasing the ability of low-income Americans to move up the income ladder.

Read the full introduction »

Chapter 1: Inequality Is Rising against a Background of Low Social Mobility

Central to the American ethos is the notion that it is possible to start out poor and become more prosperous: that hard work—not simply the circumstances you were born into—offers real prospects for success. But there is a growing gap between families at the top and bottom of the income distribution, raising concerns about the ability of today’s disadvantaged to work their way up the economic ladder.

1. Family incomes have declined for a third of American children over the past few decades.

2. Countries with high income inequality have low social mobility.

3. Upward social mobility is limited in the United States.

Chapter 2: The United States Is Experiencing a Growing Divide in Educational Investments and Outcomes Based on Family Income

Although children of high- and low-income families are born with similar abilities, high-income parents are increasingly investing more in their children. As a result, the gap between high- and low-income students in K–12 test scores, college attendance and completion, and graduation rates is growing.

4. The children of high- and low-income families are born with similar abilities but different opportunities.

5. There is a widening gap between the investments that high- and low-income families make in their children.

6. The achievement gap between high- and low-income students has increased.

7. College graduation rates have increased sharply for wealthy students but stagnated for low-income students.

8. High-income families dominate enrollment at America’s selective colleges.

Chapter 3: Education Can Play a Pivotal Role in Improving Social Mobility

Promoting increased social mobility requires reexamining a wide range of economic, health, social, and education policies. Higher education has always been a key way for poor Americans to find opportunities to transform their economic circumstances. In a time of rising inequality and low social mobility, improving the quality of and access to education has the potential to increase equality of opportunity for all Americans.

9. A college degree can be a ticket out of poverty.

10. The sticker price of college has increased significantly in the past decade, but the actual price for many lower- and middle-income students has not.

11. Few investments yield as high a return as a college degree.

12. Students are borrowing more to attend college—and defaulting more frequently on their loans.

13. New low-cost interventions can encourage more low-income students to attend, remain enrolled in, and increase economic diversity at even top colleges.

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