Education
Income Segregation and Intergenerational Mobility Across Colleges in the United States
Raj Chetty, John Friedman, Emmanuel Saez, Nicholas Turner, Danny Yagan
QUARTERLY JOURNAL OF ECONOMICS, Forthcoming
February 2020

In our paper released in 2017 (“Mobility Report Cards: The Role of Colleges in Intergenerational Mobility”), we used anonymized data from the federal government to publish statistics for each college in the U.S.  on the distribution of students’ earnings in their thirties and their parents’ incomes.  We showed that students from low-income families have excellent long-term outcomes after attending selective schools, but that there are very few low-income students at these schools.

Building on those earlier findings, we analyze how changes in the allocation of students to colleges would affect segregation by parental income across colleges and intergenerational mobility in the United States. We study these questions by linking data from tax records on parents’ incomes and students’ earnings outcomes for each college to data on students’ ACT and SAT test scores. We generate four findings:

First, we find that low- and middle-income students attend selective schools at much lower rates than their peers from richer families with the same test scores.  As a result, simply equalizing attendance rates across parental income groups conditional on test scores would reduce the under-representation of low-income students at selective schools by 38%.

Second, at the most selective schools (Ivy-plus), the middle class is heavily under-represented relative to others with the same test scores; equalizing attendance rates conditional on test scores would increase the fraction of such students from 28% to 38%, about 30% of the way to the “all college goer” benchmark.  However, doing the same for low-income students would only increase their share from 3.8% to 4.4% of the class, closing just 6% of the gap.

Third, in order to fully close the gap to the “all college goer” benchmark, we show that low-income students would need to attend all schools at rates similar to those with 160 points higher SAT scores.  To give a sense of the practice magnitude of this difference, 7.3% of low-income students currently attend Ivy-plus schools; attendance rates for these students would need to rise to 25.8%.  This is roughly the advantage that legacy students, as well as various other preferred groups, receive in the admissions process.

Finally, we show that these changes in college attendance patterns would have substantial effects on upward mobility in among college-goers in the U.S.  Prior work shows large gaps in the expected outcomes of college students from high- and low-income families; equalizing attendance rates for students with the same test scores would reduce the outcome gap by 15%.  Going fully to the “all college goer” benchmark would reduce the outcome gap by 25%.

We conclude that changing how students are allocated to colleges could substantially reduce segregation and increase intergenerational mobility, even without changing colleges’ educational programs or total educational spending.

 

The opinions expressed in this paper are those of the authors alone and do not necessarily reflect the views of the Internal Revenue Service, the U.S. Treasury Department, the Federal Reserve Board of Governors, ACT, or the College Board. The results in this paper build on those reported in an earlier NBER working paper entitled “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility.” This work was conducted under IRS contract TIRNO-16-E-00013 and reviewed by the Office of Tax Analysis at the U.S. Treasury. Chetty, Friedman, Saez, and Yagan acknowledge funding from the Russell Sage Foundation, the Bill & Melinda Gates Foundation, the Robert Wood Johnson Foundation, the Schmidt Futures Foundation, the Center for Equitable Growth at UC-Berkeley, the Washington Center for Equitable Growth, the UC Davis Center for Poverty Research, the Alfred P. Sloan Foundation, the Laura and John Arnold Foundation, the Chan Zuckerberg Initiative, the Overdeck Foundation, and Bloomberg Philanthropies.