Good or Bad for the American Dream:Do Colleges Expand or Retard Income Mobility?

By Richard Vedder

One of the main justifications for state support of higher education is that college training helps strengthen a great American tradition --the notion that anyone, regardless of his or her station in life, can succeed --economically, socially, even politically. Since a college education, rightly or wrongly, is viewed as a necessary ticket for success, we want to make it easy for anyone who wishes to attend.

Wanting to promote intergenerational income mobility (where poor kids can become rich adults --and vice versa) seems to mean supporting higher education. After all, college grads usually make vastly more income than high school ones. Spend more money on colleges and we will increase college access, opening the path to the American Dream --or so it is argued.

Actually, the facts suggest otherwise. Many of the states in the Union that have least supported higher education -- Massachusetts, New Hampshire and Colorado come to mind -- have amongst the highest proportion of college educated adults. The relationship between government higher education spending and educational attainment or even college attendance is very modest or even non-existent.

Actually, there is growing evidence that higher education may retard, not promote economic mobility. The headline on a February 20 New York Times story was "Higher Education Gap May Slow Economic Mobility." The evidence is clear that poor, relatively less educated folks are far, far less likely to have kids graduating from college than more prosperous and educated parents. Thus, since higher education is an expensive ticket for admission to the pool of those eligible for economic success, the failure of most kids from poor families to buy that ticket is retarding the historic movement of Americans from one income class to another over time. In reality, there has been relatively little change in intergenerational income mobility in recent decades, scholars at the Brookings Institution show, despite rising spending on colleges and increased enrollments. It is argued that 53 percent of children from the top fifth of the income distribution graduate from college, compared with a paltry 11 percent for those from the bottom fifth. Rather than furthering economic opportunity, college (or the lack thereof) is arguably retarding it.

If this is so, one of the main intellectual pillars supporting public support of higher education is removed. Adding to this has been the general tepid interest of the colleges themselves in this issue. Belatedly, the Ivies are playing catch up, but the Pell Grant proportion of the student body at the elite private schools is generally about one-third of that of the national average, and at the state flagship universities, only about one-half the proportion.

Why doesn't Harvard show its interest in this issue by opening Harvard West or Harvard South, giving tuition free education to kids from low income families in a setting that is far less elitist than in Cambridge? Rather than building a luxury facility (Whitman College) at a cost of $377,000 a bed to allow 400 more COY (Children of Yuppies) to go to school, why didn't Princeton open a no nonsense replica of Berea College somewhere in the rural South --a school for perhaps 500-1000 kids from low income families? Just a thought.

To be sure, kids from low income families are largely underrepresented for non-financial reasons --they do poorly in high school, in large part because they attend publicly funded cesspools of so-called learning that are a national disgrace. They also get less encouragement from their parents to excel in school. Given the disinterest in the colleges in furthering the American Dream, however, why should we continue to give them more public monies? Why don't states give colleges funds ONLY for students from low income families? Or, give vouchers to the kids themselves, with bigger amounts to those more economically disadvantaged? These would be ways that might lead to colleges being more supportive of the American Dream than of a new aristocracy.