The di­ploma gap be­tween rich and poor

The Pak Banker - - OPINION - Peter Orszag

WHEN peo­ple get more ed­u­ca­tion, they be­come more pro­duc­tive and help strengthen the en­tire U.S. econ­omy. So it is dis­cour­ag­ing to see that stu­dents from wealthy fam­i­lies are in­creas­ingly more likely to grad­u­ate from col­lege than are those from poor fam­i­lies. This per­pet­u­ates in­equal­ity from one gen­er­a­tion to the next and lim­its the eco­nomic ben­e­fits that could come if a wider swath of the pop­u­la­tion earned col­lege de­grees. The wi­den­ing gap in col­lege com­ple­tion rates is doc­u­mented in a pa­per by econ­o­mists Martha Bai­ley and Su­san Dy­narski of the Univer­sity of Michi­gan. Look­ing at chil­dren born in the early 1960s, the re­searchers found that only 5 per­cent of chil­dren from fam­i­lies in the low­est-in­come quar­tile com­pleted col­lege, while 36 per­cent of those from fam­i­lies in the high­est-in­come quar­tile did.

For chil­dren born around 1980, the col­lege com­ple­tion rate among low-in­come stu­dents rose to 9 per­cent, but among high­in­come stu­dents it jumped to more than half (54 per­cent). In other words, over two decades, the col­lege in­come gap widened to 45 per­cent­age points from 31 per­cent­age points. This wi­den­ing was ob­served even af­ter the re­searchers ac­counted for dif­fer­ences in stu­dents' cog­ni­tive skills.

It's tempt­ing to con­clude that the ad­van­tages of wealth and in­come have sim­ply in­ten­si­fied, so the odds are in­creas­ingly stacked against poorer stu­dents. No doubt that's true to some ex­tent, but Bai­ley and Dy­narski show that most of the change has been driven by trends among fe­male stu­dents. The gap be­tween rich and poor in both col­lege en­try and col­lege com­ple­tion widened by al­most twice as much for women as it did for men. (An as­ton­ish­ing 85 per­cent of girls born in well-off fam­i­lies around 1980 en­tered col­lege.) It can't sim­ply be that wealthy fam­i­lies di­rectly or in­di­rectly buy ad­van­tages for their chil­dren. If this were the case, why wouldn't it work as well for sons as for daugh­ters? So what has hap­pened to widen the col­lege gap and what can we do about it? Bai­ley and Dy­narski fo­cus on two cru­cial pieces of the pic­ture: in­equal­ity in high school grad­u­a­tion rates and in­equal­ity in col­lege com­ple­tion among stu­dents who be­gin col­lege. Gaps in high school grad­u­a­tion by in­come, the re­searchers find, ac­count for about half of the gap in col­lege en­try rates. Af­ter all, col­lege en­try isn't an op­tion for peo­ple with­out a high school de­gree. Among those who do fin­ish high school, though, the per­cent­age who go on to en­ter col­lege has risen to about 70 per­cent among those born around 1980 -- up from about half of those born around 1960. So rais­ing high school grad­u­a­tion rates among low-in­come stu­dents could make a dif­fer­ence.

One way to do this has been sug­gested by the Hamil­ton Project at the Brook­ings In­sti­tu­tion: com­pul­sory school­ing. In a Septem­ber 2012 pa­per for Hamil­ton, econ­o­mists Philip Ore­opou­los and Derek Mes­sacar of the Univer­sity of Toronto note that about half of low-in­come and mi­nor­ity stu­dents don't grad­u­ate with their high school class. They pro­pose that all states re­quire stu­dents to stay in school un­til age 18. This would at least make more low-in­come stu­dents el­i­gi­ble to at­tend col­lege. To be sure, a high school de­gree won't mat­ter much if the stu­dent isn't ad­e­quately pre­pared for col­lege, which is why Ore­opou­los and Mes­sacar cou­ple their sug­ges­tion with other re­forms to im­prove ed­u­ca­tional qual­ity. And as I have writ­ten be­fore, to get more stu­dents to en­roll in col­lege, the fi­nan­cial aid process must be sim­pli­fied.

The fi­nal, and per­haps most per­plex­ing, prob­lem to solve in­volves "per­sis­tence" -- a col­lege stu­dent's like­li­hood of com­plet­ing a de­gree. Less than 60 per­cent of stu­dents en­rolled full­time at four-year col­leges grad­u­ate within six years, the Col­lege Board has shown, and less than 30 per­cent of full-time stu­dents at two-year col­leges grad­u­ate within three years.

Not sur­pris­ingly, but some­what de­press­ingly, those who don't fin­ish are dis­pro­por­tion­ately poor. Among those born around 1980, only about a third of col­lege stu­dents from low­in­come fam­i­lies got their de­grees, com­pared with about twothirds of those from af­flu­ent fam­i­lies.

As an­other in­di­ca­tion of the chal­lenge, the col­lege com­ple­tion report from the KIPP char­ter school net­work shows an im­pres­sive 95 per­cent of KIPP stu­dents re­ceive their high school de­gree, and 89 per­cent en­roll in col­lege -- but then less than 40 per­cent grad­u­ate from col­lege.

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