Saez Tests Colleges as Engines of Upward Mobility

By M. Rossi – What is intergenerational mobility? What role does the university play in reproducing inequality or providing opportunity? On May 14, 2018, Emmanuel Saez tackled these questions in a lecture titled “College and Intergenerational Income Mobility in America.”

Saez, professor of economics and Director of the Center for Equitable Growth at UC Berkeley, spoke at the invitation of the UC Davis Forums on the Public University and the Social Good. In his talk, he crystallized a trove of data compiled from the Internal Revenue Service tax records and Pell grant records. Showing how colleges shape upward mobility, Saez shared data on parents’ income to explain access to college, on students’ earnings to explain outcomes, and on the differences in mobility rates across colleges.

High stakes 

Saez introduced his project by establishing its context—inequality and opportunity in America. In the last four decades, the share of the nation’s income going to the top 1% has doubled to 20%, while the incomes of the bottom half have not changed. It follows that children from low-income family backgrounds are much less likely to find economic success.

As compared with other advanced industrialized nations such as Canada and Denmark, America’s children are even less likely to change from the life chances into which they are born. What’s more, disparities in college attendance rates based on parent-income levels fuel this engine of inequality.

Saez measured parent income over a five-year period when their children were aged 15-19. He ranked parents relative to other parents with similarly aged children. Not surprisingly, attendance at Ivy-Plus colleges such as Stanford, Chicago, and MIT, shows a greater proportion of students from the top 1% than the bottom 50%. Income segregation across colleges is comparable to residential segregation before college for all but the Ivy-Plus schools.  

This suggests that at these top-tier, highly selective schools, students are exposed to slightly more diversity than they were growing up. While this exposure is sure to be beneficial, lower-income students still comprise much less than 10% of the population at these institutions. The larger concern is that for the vast majority of universities, students’ neighborhoods and colleges “look” the same, similar levels of “like with like.” As Saez summarized, “the stakes of being born into the right family are very high.”

Competing with Ivy League schools

In this project, Saez measured children’s individual earnings in their mid-30s, and again ranked them relative to others in their same birth cohort. He noted that earnings ranks stabilize by age 30 even at the top colleges, likely once students complete their higher education. Saez and his colleagues then constructed mobility report cards for every college in America. The mobility rate at each school is a function of “Access to the School” and “Success Rate at the School.” The rate was determined as the product of the proportion of low income students and the probability of the child reaching the top 20% of income earners. In this model, Saez compared UC Davis student outcomes with those at Stanford, Brown, and UC Berkeley.

While evidence showed Stanford produced more mobility than UC Davis, the latter did fare similarly to Brown and offered slightly less mobility than Berkeley. The ability of UC Davis to compete with the Ivy league schools can be attributed to better access to our school for lower income students.  

Individual and national success

Saez concluded by noting the significant policy changes in higher education since 2000. First, we have seen large expansions in financial aid and low-income outreach at elite private colleges. Also, many public colleges have experienced budget cuts and tuition increases. So, have these changes impacted access for students? Data show that from between 2000 and 2011, top mobility-ranked and mid-tier public schools such as SUNY-Stony Brook and Cal State LA have decreased access. Saez expressed alarm at the reality that the best schools for mobility rates are not as good as they used to be.

Despite this, there are policy lessons to consider. First, based on earnings outcome data, low-income students admitted to selective colleges do not appear to be over-placed. This provides support for policies striving to increase the number of such students admitted to selective colleges. Next, data show that efforts to expand low-income access often focus on elite colleges. However, the colleges identified as demonstrating the highest mobility rates may offer a broader and more scalable model for upward mobility. Last, the recent trends in decreased access call for a national, state, and institutional re-assessment of such policies as: costs of public education, changes in admission criteria, expansions of transfers from community colleges, and earlier interventions. 

Saez closed with a challenge, calling for future work to identify, expand, and increase access to colleges that produce the best outcomes. Not only does this have the potential to produce individual successes, it also lays foundation for a thriving national economy. 

Learn more about the Equality of Opportunity Project.

Learn more about Emmanuel Saez.