Attending college once provided a similar payoff for students regardless of their parents’ income, but that’s no longer the case, according to a new working paper published on Monday by the National Bureau of Economic Research. Since the 1960s, researchers found, college-going has become steadily “less valuable,” in terms of wage and employment benefits, for lower-income students, but increasingly valuable for wealthier ones.
Those findings appear in “Changes in the College Mobility Pipeline Since 1900,” based on a nationally representative database of Americans that draws from dozens of surveys and administrative datasets matching high-school graduates’ educational attainment with their standardized test scores, colleges, majors, and employment outcomes. The paper’s authors found that the college-going premium — the difference in wages earned by college graduates and people with just a high-school diploma — was comparably large for lower- and higher-income students born in the 1900s. But by the end of the last century, that gap had narrowed for the poor students and widened for wealthier ones.
Why? Zachary Bleemer, assistant professor of economics at Princeton University, set out years ago to answer that question. He worked with Sarah Quincy, an assistant professor of economics at Vanderbilt University, to explain the causes of “collegiate regressivity,” or why, as Bleemer puts it, “going to college has become regressive, offering more to kids the richer they are.”
Three factors largely explain that trend, the researchers found. The first: increasing stratification in quality between research- and teaching-oriented universities, as defined by student-to-faculty ratios, instructional expenditures, and graduation rates. “The biggest part of the story,” Bleemer wrote in an email to The Chronicle, “is that federal and state funding have disproportionately gone to research-oriented public and private universities that have always enrolled fairly high-income students, leaving the satellite publics that mostly enroll lower-income students behind.”
Furthermore, lower-income students have been “disproportionately diverted into community and for-profit colleges since 1980 and 1990, respectively,” the paper says. Such institutions pulled many lower-income students out of four-year colleges, Bleemer says, decreasing their odds of obtaining a bachelor’s degree and earning higher wages in the long run.
Finally, shifts in who chooses which majors over time have played a significant role, too. Since 2000, higher-income students have migrated away from humanities majors, with more and more of them opting for computer science and other engineering fields. “Lower-income kids are now more likely than higher-income kids to be humanities majors in the U.S.,” Bleemer says, “a dramatic change that has reduced college’s value for those students.”
In California, for instance, computer science has grown twice as fast among high-income students as among lower-income ones, the researchers found. “This is probably as a result of university policies — higher admissions bars, GPA-based restrictions, very low grades in introductory courses, etc. — that increasingly restrict access to computer science and disproportionately exclude lower-income students,” Bleemer says.
Those three factors mostly explain why students from the bottom parental-income tercile earn less than half the college-wage premium that students in the top tercile do, the researchers conclude. “Despite substantial policy efforts,” they write, “to widen lower-income students’ access to high-value four-year universities, their increasing enrollment at those institutions play only a small countervailing role.” And the share of low-income students at highly selective colleges, as Bleemer notes, remains relatively small.
It’s worth remembering that there are many ways to define the value of attending college. Long-term earnings are just one measure of the benefits of a given degree, and one graduate might assess those benefits much differently than another does.
But at a time when seemingly everyone’s asking the big question — Is college worth it? — this new research offers an important reminder that there’s no one-size-fits-all answer. Where you go and what you study matter a lot. And your parents’ income can play a large role in determining both.
Still, nothing here suggests that college is no longer a sound investment for lower-income students. “While returns have fallen for those students,” Bleemer says, “they are still clearly positive.”
