The Myth of American Universities as Inequality-Fighters

Colleges aren’t doing nearly as much to expand economic opportunity as most people think.

Brian Snyder / Reuters

How can the U.S. solve the problem of lasting poverty? For some, the answer starts with education. Many studies show that young people who go to college earn more than their non-college peers, and that teenagers from poor families that attend selective schools especially benefit. While the country’s neighborhoods may be stratified, and its boardrooms may be biased, at least the nation’s best universities can help students from poor families become thriving workers.


Kind of. In a fascinating new paper published this summer, five economists, Raj Chetty, John Friedman, Emmanuel Saez, Nicholas Turner, and Danny Yagan, call into question higher education’s role in promoting upward mobility. The centerpiece of the paper is “mobility report cards” for each college in America. The researchers considered 30 million students between 1999 and 2014 and compared their parents’ incomes to their own post-college earnings, by school. With this data, they could see exactly which colleges helped the most students rise from the bottom of the earnings ladder to the top.

They found that America’s top universities are largely closed to the poor, merely helping well-off students remain well-off. The best schools for helping low-income students become high-income graduates are accepting fewer and fewer kids from poor families.

This study doesn’t just challenge one big myth about American universities and poor students. It combats several popular myths among both liberals and conservatives. Let’s go through three.

Myth #1: America’s most prestigious universities are great engines of upward mobility.

The most important takeaway from the paper is simple, and sad: The colleges that are most able to launch people to the very top of the American economic system often are the least accessible to low-income students.

Poor students who graduate from Ivy League universities (and their equivalents like Stanford, Duke, and MIT) have a much better shot at entering the top 1 percent than low-income graduates of other colleges. But these hyper-selective schools are also hyper-elite. A child from the richest 1 percent of families is 77 times more likely to attend an Ivy (or an equally selective college) than a child from a family in the poorest quintile.

It doesn’t have to be this way. Elite institutions have the capacity to double or triple their low-income access (more on that below). But even in the 21st century, most of them are essentially plutocratic.

Elite Colleges Are Truly for the Elite
*and similarly selective colleges (The Atlantic)

The true mobility champions of higher education are the colleges that both accept lots of low-income students and send them to the upper quintile of earnings at relatively high rates. These schools are mostly mid-tier public institutions, like State University of New York at Stony Brook, where 16 percent of students are from the bottom quintile, more than four times the Ivy League average. Other all-stars in this category include California State University in Los Angeles, Pace University in New York, and South Texas College.

These schools “combine moderate success rates with high levels of access,” the researchers write. In other words, they aren’t millionaire-minters like the Ivy League. But they accept a lot of low-income students and reliably turn many of them into above-average earners.

Myth #2: Low-income students, who are more likely to be minorities, can’t succeed at selective colleges.

If the first myth is a liberal fantasy, the second is a conservative fallacy. For example, in oral arguments during the affirmative-action case Fisher v. University of Texas, former Supreme Court Justice Antonin Scalia said, “It does not benefit African­ Americans to get them into the University of Texas where they do not do well, as opposed to having them go to a less­ advanced school, a slower­-track school where they do well.”

Scalia was referring here to “mismatch theory,” a conservative critique of affirmative action, which says that minority students shouldn’t get preferential treatment at colleges, because they’ll just fail. Similar critiques have been made of affirmative action programs that seek both ethnic and economic diversity.

But the “mismatch theory” doesn’t match the data. “Students from low-income families are not over-placed (or ‘mismatched’) at selective colleges,” the economists conclude in this paper. Instead the results show that children from low- and high-income families who attend the same college have “very similar earnings outcomes.”

This suggests one of two things: Either selective colleges are particularly skilled at helping poor students catch up to their richer classmates, or else they are accepting rich and poor students of relatively similar abilities. Either way, the idea that low-income students can’t cut it at prestigious colleges appears to be hogwash. This suggests that America’s most prestigious universities could afford to try a bit harder to find more brilliant low-income students, without worrying that they’ll fail in school. But that’s not what these schools are doing.

Myth #3: Selective schools are admitting more low-income students.

Full confession: This is a story that I absolutely believed. After all, the number of students from low-income families attending college has soared this century. Spending on Pell Grants for low-income students nearly tripled between 2001 and 2011.

But the boom in Pell Grants appears to have little to do with better access to college among the very poor. Congress raised the income-eligibility threshold for Pell between 2000 and 2011, which automatically increased the number of students who qualified. Then, when household incomes collapsed after 2007, more families suddenly qualified under the new threshold. “Together, these changes fully account for the observed increase in Pell shares,” the economists write.

At the Ivies and their ilk, there has been almost no overall growth in students whose families are in the bottom 20 percent. The same is true for four-year colleges, as a group. Practically the entire growth in low-income students has happened at for-profit colleges, where graduates have the worst outcomes.

Chetty, et al

What this means is that higher education’s mobility champions are becoming less accessible over time. “The fraction of students from low-income families at the institutions with the highest mobility rates (like SUNY-Stony Brook and Glendale Community College) fell sharply over the 2000s,” the researchers write. This can be seen clearly in the graph below.

Chetty, et al

Toward the end of the paper, the economists turn to address the holy grail of higher education policy: What distinguishes the best schools? Is there a higher-ed formula for upward mobility?

Sadly, the grail search is still on. Practically none of the variables the economists considered—including per-student spending and teacher salary—could predict which public colleges were best at turning low-income students into high earners. The researchers do present some strong evidence that schools with higher Asian American and immigrant populations have higher mobility. What’s more, they find that even non-Asian American students at colleges with large Asian American populations benefit.

It’s a fascinating finding, but it’s difficult to figure out exactly what’s causing what. Is this just another sign that America has outsourced upward mobility to immigrants? Is there a cultural element where Asian American students are influencing their peers? Or are Asian American populations just a proxy for some other factor, like completion rates or the greater prevalence of certain majors? The economists are careful not to state what they cannot prove.

In a separate section of the paper, they analyzed which variables were most important in minting top-percentile earners—not just the well-off, but the truly rich. But these conclusions weren’t very surprising. “Colleges that have higher [upper-tail] mobility rates tend to be smaller, have larger endowments, higher completion rates, greater STEM shares, higher tuition, instructional cost per student, and average faculty salary,” they write.

Does that sound interesting? Well, remember that Ivy League schools (and their selective, prestigious equivalents) are the only places that reliably churn out tippy-top earners. So, this conclusion is pretty redundant. It’s like saying: The schools that are most like Ivy League schools are schools in the Ivy League.

In a way, that is the most important takeaway of the paper. When it comes to income mobility, America’s most prestigious schools are like factories working at half capacity. They have the potential to transform the lives of thousands, thanks to their resources, peers, teachers, and alumni networks. But they aren’t taking in more low-income students. Meanwhile, the best mobility factories, like the CUNY schools of New York, have figured out something. But economists can’t yet say what.