The rags-to-riches promise of the American dream relies on pathways for pulling oneself up by one’s bootstraps. The evidence is complex, but the on-campus bootstrap supply appears quite limited these days.
Selective higher education institutions, and especially elite institutions, have in certain ways never had it better. They’re wealthier (burgeoning endowments) and more sought after (plummeting acceptance rates) than ever, and they’re still commanding top dollar (soaring tuition rates). The picture is rosy.
Yet they have also suffered serious reputational damage in recent years. The ‘Varsity Blues’ scandal, which revealed corruption in admissions at several top universities, appeared to confirm the very worst that the elite-haters suspected all along. And those high prices (in the form of tuition) are also a target of criticism and outright derision.
But here’s the central question: Are higher education institutions, and especially the most selective, part of the meritocratic ladders to prosperity that are so fundamental to our stories about an egalitarian society? Given the significant wage premium to higher education in the labor market, and vast access accorded to holders of degrees, is there truly meritocratic access to the tools that can make those markets fair?
Despite the inevitable complexity of these questions, recent research can give us a few glimpses. It boils down to a few points, and throughout this post, I will use elite to refer to the Ivy League plus the handful of institutions with similar acceptance rates and per-student endowments, such as Stanford, Duke, and the University of Chicago:
- The very richest households (the top 1% by income) are highly overrepresented at elite institutions, considerably more even than the rest of the top 20%.
- Poor and middle-income households (up to the 60th income percentile) are highly unrepresented at the large majority of elite and selective institutions.
- The role of many elite and selective institutions in providing economic mobility (or “social mobility” or “upward mobility”) – that is, movement up the income distribution – is extremely modest.
Let’s march quickly through the surprising evidence. I address the key points, but I encourage readers to explore the New York Times’ excellent reporting on this research, linked below throughout.
The starting point is the path-breaking research by Opportunity Insights, a group of researchers based at Harvard. Economists Raj Chetty, John Friedman, and David Deming created and analyzed a data set of millions of college students between 1999 and 2015, linked to family income tax records in order to see the students’ economic origins and labor market outcomes. The evidence itself is so deep and so broad that it is challenging to characterize concisely, but several points struck me most.
First, the overrepresentation of the top 1% – today, households making over $611,000 per year – is truly striking. These students have made up a significant share, often a fifth or more, of the student body at many top institutions, and not only (or even primarily) the elite. This overrepresentation feels icky in itself, but it’s clearly systematic in hard-to-address ways: SAT scores are also highly correlated with household income, though one suspects that this does not mean that the wealthiest children are all the smartest. If wealth provides a path to the measures of ‘merit’, and that appears to be the case, one must doubt the meritocratic nature of the process.
Second – lest you begin to think the distribution is fair and balanced beyond the one-percenters – the lower half of the income distribution is deeply unrepresented. It’s clearly rich folk just beyond the top percent who dominate, with well over half of most selective college populations coming from the richest quintile (the top 20% by income). Most shocking, the Times provides an excellent side-by-side comparison of the top 1% vs. the bottom 60%, and they find a sizable list of institutions where the share of the former exceeds the share of the latter.
Third, the degree of economic mobility is, by most measures, strikingly low. Opportunity Insights tabulates the share of students moving up two income quintiles for the many hundreds of colleges and universities captured in the data, and even among the most prestigious institutions, the numbers are small. In the Ivy League, the range is 8.7% (Princeton) to 16% (Cornell). Of course, this result stems primarily from the fact that the large majority of students comes from the top two quintiles, so it’s impossible for them to move up two quintiles, but the result is still disappointing.
Further consider one measure of substantial mobility, moving from the bottom quintile to the top quintile – in other words, moving from genuine poverty to affluence (in this moment, from a household income that’s below $31,000 to one that’s greater than $155,000). This happens! But the share of students making this leap is disappointingly low, from around 3% at Columbia and Cornell, down to around a stingy 2% at Penn, Stanford, and Yale, to a measly 1.8% at Harvard, 1.4% at Dartmouth, and 1.3% at Princeton.
Crucially, it isn’t just the fancy schools: I encourage you to browse a few dozen selective and well-known regional private institutions (University of Puget Sound in Tacoma, Kenyon College in Ohio, University of Redlands near L.A.), and you’ll find the same result. Over and over, these private institutions seem to be making about the same contribution to upward mobility as Princeton, i.e., not much. The causes are slightly different (in particular, these schools have dramatically smaller endowments and therefore can’t provide such significant need-based aid), but the common trend underscores that higher education more generally is not a consistent source of upward mobility.
Perhaps more troubling, many of the most prestigious and selective public institutions – whose raison d’être is presumably to turn residents’ tax dollars into opportunity for their states’ children – offer similarly little opportunity to the lowest-income households. The share moving the bottom quintile to the top is lower than that of most of the Ivies at the flagship schools in Michigan (1.5%), North Carolina (1.2%), Virginia (1.2%). This is unsurprising since a majority of those students come from top-quintile households, another sign that the wheels of economic mobility may not be turning smoothly. (Again, browse the data for more details.)
You may be wondering: Is this inevitable? If the same thing is happening everywhere – elite small colleges, the Ivy League, flagship publics – are we simply mourning the death of what once was? As previously acknowledged, certainly there has been a shift in a range of structural factors, and the blame does not fall entirely on the institutions I’ve mentioned. But it’s worth calling out a few pockets of higher ed in which the American Dream is still very much alive. As shorthand, I’ll call them New York City and California.
The City University of New York unabashedly calls itself “a transformative engine of social mobility” and the numbers confirm it. With the numbers above as your guide, consider these:
| Selected CUNY institutions | Share moving from bottom to top quintile | Share moving up two income quintiles |
| City College of New York | 12% | 51% |
| Hunter College | 7.5% | 39% |
| Baruch College | 13% | 49% |
Similarly though to a lesser degree, a range of California institutions, particular in the California State University system, deliver significant upward mobility to their students. San Jose State, Cal Poly Pomona, and Cal State Bakersfield are good examples.
Interesting, the California public flagships also stand apart from the aforementioned ones. UCLA and UC-Berkeley don’t quite do what City College does, but they are in a class by themselves among globally prestigious U.S.-based research institutions (detailed data here for Berkeley and UCLA). Even the University of Southern California – a bubble of wealth amidst L.A. poverty, and which my high school peers regularly called the “University of Spoiled Children” – has almost the same profile as Berkeley, moving 4.9% of students from poverty to affluence and 20% up two quintiles.
So the American Dream is still alive…in parts of New York and California? To some extent, yes – but these modest results are isolated, and they do not change the overarching trend: Higher education has largely ceased to provide significant economic mobility.
Why care? Because meritocracy matters
Let’s take a step back and assess the importance of these findings in the context of U.S. society. A shot at upward mobility is not supposed to be just a good story and a self-serving myth; indeed, it is supposed to be fundamental.
The deterioration in the mechanism of meritocracy troubles honest capitalists who want to believe their wealth is the deserved result of their smarts and hard work. A few years ago, I reviewed Capitalists Arise! End Economic Inequality, Grow the Middle Class, Heal the Nation, a solid little book by former marketing executive Peter Georgescu, and this is Georgescu’s central lament: that one can no longer be sure that the competent and committed not born into wealth have a legitimate shot at success.
Now, are the missing rungs in the ladder to prosperity entirely the fault of higher education institutions, especially the most prestigious? Certainly not. Indeed, these institutions vigorously defend their records, and they have a few good arguments. For the few low- and middle-income students who can get into the richest institutions, financial aid – which is entirely need-based among top universities and colleges – covers all of one’s costs. A student whose family income is at the national median, currently around $75,000 per year, will be expected to contribute very little and will in many cases emerge from a nominally expensive elite college debt-free. Of course, that student still has to defy the odds and get in, but if that falls into place, the future is admittedly bright.
Of course, this isn’t the whole story – indeed, we’re talking about millions of individual human beings, and that means there are many tales of education as a tool for advancement, and many examples in which someone’s hard work translates into success. Yet the overall picture is grim. If inequality increasingly perpetuates itself – and in no small part through education, which should instead be the great opportunity for all – then we have arrived at a truly dark time.
Note: This post is part of my on-going teaching about economic inequality to MBA students and undergraduates at the University of Oregon. To see other materials, visit my project site with teaching resources on economic inequality.
Here are the complete references for the sources in this post:
- “Study of Elite College Admissions Data Suggests Being Very Rich Is Its Own Qualification,” By Aatish Bhatia, Claire Cain Miller and Josh Katz. July 24, 2023. New York Times. Url (accessed November 5, 2023): https://www.nytimes.com/interactive/2023/07/24/upshot/ivy-league-elite-college-admissions.html
- “Some Colleges Have More Students From the Top 1 Percent Than the Bottom 60. Find Yours.” New York Times. Url (accessed November 5, 2023): https://www.nytimes.com/interactive/2017/01/18/upshot/some-colleges-have-more-students-from-the-top-1-percent-than-the-bottom-60.html
- Diversifying Society’s Leaders? The Determinants and Causal Effects of Admission to Highly Selective Private Colleges,” by Raj Chetty, David J. Deming, John Friedman. NBER Working Paper No. 31492, July 2023. URL (accessed November 5, 2023): https://opportunityinsights.org/paper/collegeadmissions/
- America’s Great Working-Class Colleges,” by David Leonhardt. Jan. 18, 2017. New York Times. URL (accessed November 5, 2023): https://www.nytimes.com/2017/01/18/opinion/sunday/americas-great-working-class-colleges.html
