Social Economic Status, College Tier and the Effect on Social Mobility

• In Event: Poster session III
  In Poster Session: Poster session 3

Proposal

Objectives
The purpose of this project is to explore the following questions: (1) Is there upward intergenerational mobility after graduating from college? And more importantly, (2) is such effect (if there is any) varied based on in which colleges (or college tier) that the students went to?

Perspectives
The human capital theory stresses on the importance of investing in education as a mean to upward intergenerational mobility both economically and socially (Woodhall, 1987). It is the promise that once you study hard and finish college, you are more likely to have better jobs, earn more money, have better social status and become more successful in life. However, unlike most of the international system in the world, the United States is an unique, very decentralized system of higher education (Clark, 1986). There is no government organization or entity that oversee the quality of higher education in the US and each accredited school have power to operate independently. In this study, we want to explore if going to colleges does in fact fulfilled part of what we call the American Dream.

Data Sources
Data sources include students’ (in the birth cohort 1983 and 1984) family status and their outcomes at year 2014 by college obtained from the 2014 Equality of Opportunity Project, and general features of colleges and mobility statistics from the 2014 CollegeNET Social Mobility Index data. After merging two datasets and deleting the missing data using a listwise approach, there are a total of 494 universities and colleges in the United States (this is a school-level dataset). It has 91 variables depicting college, students’ and parents’ income on multiple level.

Method and Results
This study explores whether family economic status, graduates’ earnings and social mobility are different on six tiers of college. Our outcomes variables are the mobility variables composites after students’ graduation in 2014.
We interested in whether students have equal opportunity to get into universities and whether parents’ income distributions are different based on types of schools. Not as surprisingly, mean of family incomes for students from ivy plus universities is the highest one, whereas mean of family incomes for students from selective public schools is the lowest one. Family incomes are higher for students who choose to attend the private universities than for students who choose to attend the public universities. There is a significant difference on the percentage of high-SES families of all tiers except tier 1 and tier 2. Similarly, the majority of students from elite schools, including Ivy plus and other highly-selective public and private schools, are from high-SES families. Compared with private universities, public universities have a higher percentage of low-SES students. Selective public universities have the largest percentage of low-SES students.
Additionally, among all six tiers of universities, graduates from ivy plus universities have the highest mean income in their early career; and graduates from other elite schools have the second highest mean income. Selective public schools’ graduates have the lowest mean income. The distribution of the median of graduates’ income is identical as that of their mean income, which is also similar to the distribution of parents’ mean income across 6 different groups of schools. The distribution of the percentage of low income shows that, for the same cohort, ivy plus and elite schools have the lowest percentage of graduates that have low income, whereas selective public and private schools, especially selective public schools, have the largest percentage of graduates with low income. Thus, high-SES students at elite universities are more likely to get a better earning than low-SES students at the same type of college and especially at less-selective colleges.
Mobility rates of six groups are not statistically different, which means that the joint probability of parents in bottom quintile and child in top quintile of the income distribution is not different across all tiers of colleges. However, there is no difference on the joint probability of parents in bottom quintile and child in top 1% of the income distribution for highly selective public and private colleges, and selective public and private colleges. For all the other tiers of colleges, ivy plus universities have the highest upper-tail mobility rate among all 6 tiers schools, followed by other elite schools, highly selective public schools, highly selective private schools, selective private and public schools.
Additionally, Ivy League students have a much better chance for upward mobility than their peers, especially the chance if their parents in bottom quintile and they get to end up in top 1% of the income distribution. This probability is much higher than their peers who go to different type of schools. However, similar to MANOVA result public schools seem to have a better upward mobility if we consider the cost of tuition. Last but not least, the test of equally centered means across the 3 mobility measures indicates at least two tiers are significantly different from each other in the centered means.

Significance of the Study
All in all, according to the MANOVA, compared with low-SES students, high-SES students are more likely to attend elite schools. In return, they are much likely to earn much more income after graduation as compared to their peers. This finding contributes what some research referred as the “funnel of privileges” (Terrazas, 2015). In particular, students from higher background family not only get to go to better colleges but they also more likely to graduate from college debt-free, become a home owner much faster as well. On the other hand, students from low-income family and especially those who come from less-selective colleges are less likely to get a “good investment” from their degree. In their early career, they earn much lower than high-SES students at more selective colleges. However, as compared to the private schools, the public schools seem to be a better choice for intergenerational mobility. Similar to the MANOVA, the profile analysis illustrates that the six tiers of schools have significantly distinct profiles and that going to an Ivy League school is much likely to increase one’s intergenerational social mobility.

Authors

• Jiaqing Zhang, Teachers College, Columbia University

• Linh Nguyet Doan, Teachers College, Columbia University