Wealth Gap in College Graduation Rates Growing, Study Finds

Wealth Gap in College Graduation Rates Growing, Study Finds

Despite a long-term rise in educational attainment, the family wealth gap in college graduation rates widened for children born in the 1970s and 1980s, a study published in the journal Demography finds.

According to the report, Growing Wealth Gaps in Education (63 pages, PDF), disparities in high school graduation and college access between children from high-net-worth families and those from middle- and low-net-worth families narrowed somewhat for children born in the 1980s. The gap in college graduation rates widened, however, as improvements among children from wealthier families far outpaced progress among those from less wealthy households. As a result, although more children born into the bottom two wealth quintiles in the 1980s attended college, the share of those completing a college degree remained low at 11.8 percent (nearly unchanged from 11.3 percent among those born in the 1970s), while the share of those born into the wealthiest quintile completing a college degree jumped from 46 percent to 60 percent. Indeed, the gap in college graduation rates between the top and bottom wealth quintiles among children born in the 1980s was 9.4 percentage points wider than among those born in the 1970s.

Funded by the Spencer and Russell Sage foundations and conducted by University of Michigan assistant professor Fabian T. Pfeffer, the study found that family wealth plays a role in predicting educational outcomes independent of other socioeconomic factors, including family income. The report also examined the role of increasing wealth inequality: when comparing the median family net worth of children between the ages of 10 and 14, for example, the ratio of the top 10 percent to that of the bottom 80 percent increased from 13.8 in the 1980s to 22.4 in the 1990s to 57 in 2015. While Pfeffer found that the rise in wealth inequality only partially explains the growing wealth gap in college graduation rates, he suggests that changes in the importance of wealth for college success — rather than the distribution of wealth itself — could  be a contributing factor.

"This growing gap has big consequences, because the benefits of college come largely from graduating, not merely attending some classes," said New York Times columnist David Leonhardt. "If anything, the consequences of failing to complete college seem to be increasing, as the economy becomes ever more technologically advanced."

Fabian T. Pfeffer. "Growing Wealth Gaps in Education." University of Michigan Report 03/24/2018. David Leonhardt. "The Growing College Graduation Gap." New York Times 03/25/2018.