Data Snapshot: Is Higher Education a Pipeline to the American Dream?

In its purest expression, the American Dream is the idea that children can work hard and secure a better life than their parents by climbing the economic ladder. In 1940, the promise of the American Dream was all but a foregone conclusion—some 92 percent of children born that year grew up to earn more than their parents. Today, those odds are no better than a coin flip, an astonishingly precipitous decline.

At Opportunity Insights, a research and policy institute based at Harvard University, my colleagues and I are harnessing the power of big data to revitalize the American Dream. We focus our research on important childhood benchmarks, including the effects of neighborhoods, high-quality teachers, and access to higher education. 

In 2017, we released our Mobility Report Cards. In this research, we used data of more than 30 million students from 1999 to 2013 to characterize intergenerational income mobility at each college in the United States. The results we uncovered were striking: we found that access to higher education is a more significant driver of mobility than graduation rates alone. Yet many institutions are still not delivering on higher education’s promise of creating a pipeline to the American Dream.

Access to college varies significantly by parental income. Children whose parents are in the top 1 percent of the national income distribution are seventy-seven times more likely to attend an Ivy League college than those whose parents are in the bottom 20 percent of the income distribution. Furthermore, the fraction of students from low-income families did not change substantially between 2000 and 2011 at elite private colleges but fell sharply at colleges that provided students with the largest jump in income mobility.

Overall, the research points to the importance of state university systems and community colleges for their role in creating a pipeline to the American Dream. One example is Manhattan’s City College, part of the City University of New York system. That college’s student body comes from a diverse range of economic backgrounds, with 34 percent of students from the poorest 20 percent of families in the nation. And 57 percent of City College graduates from the poorest families are now earning salaries that place them in the top three-fifths of incomes nationwide. 

Likewise, the University of California system is helping to promote economic mobility for low-income students. UC enrolls a higher share of the lowest-income students (those from the bottom 20 percent) than other four-year universities and enrolls comparable shares of middle- and high-income students. Additionally, according to our research, a first-generation UC graduate typically earns an annual salary of about $50,000 five years after graduation, which is about the same as a UC graduate who had a parent who graduated from college. Overall, the share of UC alumni from the bottom 20 percent of income who move into the top 20 percent of income as adults is higher than that at other four-year universities in California and across the country. 

In fact, the University of California, Berkeley, stands out as offering one of the highest increases in mobility from the bottom 20 percent of the income distribution to the top 1 percent. This impact is underscored by the large share of low-income students that Berkeley accepts, more than any other institution offering the same bottom-to-top success—a group that includes mostly elite private institutions like Stanford, Duke, and Ivy League universities. University administrators should consider the impressive precedent set by institutional systems like CUNY and UC when evaluating their own admissions and financial aid policies. 

All of the data from our research are free and publicly available on our website. While the data do not point to specific university policies, they do yield a set of lessons that administrators can use to guide efforts to make their institutions engines of upward mobility for students.

• First, low-income students admitted to selective colleges and universities go on to have earnings comparable to their peers from higher-income families. This result mitigates the concern that attending a selective institution may be detrimental for students from disadvantaged backgrounds, providing support for policies that seek to bring more such students to selective colleges. 
• Second, efforts to expand low-income access often focus on elite institutions, such as Ivy League universities. Although these highly selective colleges produce excellent outcomes, increasing access to other high-mobility-rate colleges may provide a more scalable model for improving upward mobility for large numbers of students. The colleges with the highest mobility rates have annual instructional expenditures less than $6,500 per student on average, far lower than the $87,000 per student spent on instruction at elite private colleges. 
• Finally, recent trends in access—a decline at colleges with the highest mobility rates and little change at elite private colleges despite their efforts to increase financial aid—call for a reevaluation of policies at the national, state, and college levels. It is worth considering changes in admissions criteria or expansions of transfers from the community college system.

To take the next step of turning this research into action, we worked with a diverse array of colleges and universities across the country to find ways to address this challenge scientifically. Our partner institutions enroll more than 5.2 million undergraduate students at four-year schools and community colleges, representing more than 30 percent of the entire US undergraduate population at degree-seeking institutions.

This initiative, called the Collegiate Leaders in Increasing MoBility (CLIMB), helps university administrators increase the number of low-income students who enroll at American universities and boost the share who ultimately graduate and join the middle class. 

We hope that arming administrators with these tailored mobility data will empower a more effective evaluation of how their colleges and universities are contributing to the American Dream. Early results are promising, which is good news. All of us benefit if society tries new ways to lift more children out of poverty.

John N. Friedman is professor of economics and international and public affairs at Brown University and a founding codirector of Opportunity Insights at Harvard University.