College and Inequality

Folks like me have spent a good deal of energy over the past couple of years noting that a very large portion of the increase in income inequality in America can't be attributed to the rising "skill premium" for college graduates. Still, a large portion of growing inequality can be attributed to this skill premium. Why the premium should be growing is, as Brink Lindsey points out, actually something of a mystery -- growing demand for the skills of college graduates ought to lead to an increase in the proportion of people who graduate from college, but it hasn't. Lindsey rounds up the considerable evidence, meanwhile, that the price of college admission isn't really the crux of the problem; paying for college is a large burden on many families, but those with the ability to do college level work generally manage to shoulder the burden and it pays off in the long run. The problem is that a huge proportion of low-income young people are inadequately prepared.

Thus far, I'm all in agreement. Lindsey then attributes this gap mainly to differences in "parental culture." I think that's probably true, but on another level it's an odd thing to focus on since we really have very few policy levers on that front. That might mean that we just don't have any policy levers at all, but in the real world (as Lindsey acknowledges) we actually do have a variety of available options regarding early childhood education, better practices in our primary and secondary schooling, etc. I would add to this the simple thing of better information since I'd venture that relatively few working class families are at all aware that the skill premium has been growing so rapidly. Lindsey's final point is an interesting one:

Furthermore, progressives need to understand that the rise in skill-based inequality is not some populist morality play of capitalism run amok. On the contrary, in many ways it can be seen as a capitalist success story. For a generation now, our economy has been creating more opportunities for the productive use of highly developed cognitive skills than there are people able to take advantage of them. That is what the run-up in the college wage premium is telling us. Economic development has raced ahead of cultural development; as a result, culture is now acting as a brake on upward mobility. So, instead of railing against the economic system, we need to do a better job of helping people to adapt to it and rise to its challenges. The rules of the game aren't the problem--we just need more skillful players.

I think there's something to that, but the point of the morality play is that nothing is going to change policywise unless people think that reconciling ourselves to ever-growing inequality is wrong and, therefore, we ought to be interested in ways to reverse the trend. Meanwhile, I think it's not wrong to think of some of the aspects of our school system's poor treatment of low-income kids as precisely representing affluent people gaming the system (by, among other things, withdrawing across jurisdictional boundaries which they then zone with large lot requirements and "overcrowding" rules so as to prevent poor people from moving there) to preserve positions of privilege for their children.