The financial reward for a low-income student graduating from college has dropped by 50% since 1960.
Higher education has become more regressive as the wage premium for those coming from poor backgrounds continues to shrink. We are raised to believe that a college degree is the ultimate equalizer that can lift anyone into the middle class regardless of their start. Instead, the data shows that the pipeline for social mobility is breaking down. Students from wealthy families still capture the vast majority of the economic benefits of a degree. For those at the bottom, the promise of a university education as a way out of poverty is becoming a myth.
Changes in the College Mobility Pipeline Since 1900
SSRN · 5259633
Going to college has consistently conferred a large wage premium. We show that the relative premium received by lower-income Americans has halved since 1960. We decompose this steady rise in ‘collegiate regressivity’ using dozens of survey and administrative datasets documenting 1900–2020 wage premiums and the composition and value-added of collegiate institutions and majors. Three factors explain 80 percent of collegiate regressivity’s growth. First, the teaching-oriented public universities wh