Recent Research: Quantifying Impact of Education and Other Factors on Economic Mobility

The best path to breaking the cycle of poverty from one generation to the next is a college degree, according to a new Brookings Institution report. Getting Ahead or Losing Ground: Economic Mobility in America reveals 41 percent of degree-holding people whose parents’ income placed their families in the bottom 20 percent of the population, or quintile, now have incomes placing them among the top 40 percent. Conversely, only 16 percent of college degree holders originally from the lowest income group remained in the bottom income quintile in adulthood. The balance, 47 percent of degree-holders from the lowest income population, move up either one or two income quintiles.

 

Further evidence of the importance a college education plays on breaking poverty is provided by those who do not obtain a degree. Only 14 percent of adults from a lowest economic group who do not attain a college degree make the ascent to the top 40 percent by income, the report states. Forty-five percent of non-degree people growing up in the lowest quintile remain there in adulthood.

 

Education may impact mobility at the highest rungs of the income ladder as well. For people whose parents originate from the highest income quintile, 54 percent remain at the top quintile in adulthood if they have attained a college degree. If they did not attain a college degree, only 23 percent remain in the top quintile, while 18 percent fall to the bottom income quintile.

 

The study also tracks how the income gap between degree-earners and non-degree-earners continues to widen. Adjusted for inflation, the gap between those whose highest attainment was a four-year college degree and those with a high school degree in 1964 was around $10,000. By 2005, this gap grew to more than $29,000. Since the early 1980s, income levels for both high school dropouts and those with only a high school education have remained constant. In this same period, both graduate degree-holders and four-year college degree-holders have experienced noticeable increases in income.

 

The education disparity extends into racial categories, the report indicates. In the 1970s, the share of whites who attained a college degree was twice the share of African Americans and Hispanics, data show. Since 1970, even though all racial groups have experienced small increases, the gaps between the races have become wider.

 

While the study shows the differing paths of those with and without a college degree, it also recognizes other factors that may play a role in the income attainment of individuals, such as family background, pre-school education and K-12 education.

 

The report’s purpose is to provide a comprehensive overview of economic mobility data and does not provide recommendations from a policy perspective. Besides information on how economic mobility relates to education, other chapters of the document consider the relationships of mobility to gender, race and wealth history, in addition to international comparisons.

 

Getting Ahead or Losing Ground: Economic Mobility in America can be accessed at:

http://www.economicmobility.org/reports_and_research/mobility_in_america