Economic Mobility - Education

Education

It is a widespread belief that there is a strong correlation between obtaining an education and increasing one’s economic mobility. The education system in the United States has always been considered the most effective and equal process for all individuals to improve one’s economic standing. Despite the increasing availability to education for all, family background continues to play a huge role in determining economic success. To individuals who do not have or cannot obtain an education, the greater overall levels of education can act as a barrier, increasing their chance of being left behind at the bottom of the economic or income ladder.

Studies have shown that education and family background has a great effect on economic mobility across generations. Family background or one’s socioeconomic status affects the likelihood that students will graduate from high school or college, what type of college or institution they will attend, and how likely they are to graduate and complete a degree. According to studies, when split into income quintiles including the bottom, second, middle, fourth and top, adult children without a college degree and with parents in the bottom quintile remained in the bottom quintile. But if the adult children did have a college degree, there was only a 16% chance that they would remain at the bottom of the quintile. Therefore, it was proven that education provided an increase in economic status and mobility for poorer families. Not only does obtaining a college degree make it much more likely for individuals to make it to the top two quintiles, education helps those who were born in the top quintiles to remain in the top quintiles. Therefore, hard work and increasing education from those who are born into the lower quintiles can boost economic status and help them move ahead, but children born into wealthier families do seem to have the advantage. Even when the likelihood of attending college is ignored, studies have shown that out of all the students that enroll in college, socioeconomic status or family background still has an effect on graduation rates with 53% of those from the top quintile receiving bachelor’s degrees along with 39% from the middle and 22% from the bottom quintile. According to the 2002 US Census, students can expect to earn on average about $2.1 million with a bachelor’s degree over the course of their working career. That is almost $1 million more than what individual’s without a college degree can expect to earn.

Considering that inflation rates have not kept up with increasing tuition rates, disadvantaged families have a much harder time affording college. Especially considering the increased competition for college admittances at public schools, students from lower economic quintiles are at an even greater disadvantage. Tuition rates over the past ten years has risen 47% at public universities and 42% at private universities. While having to take out more loans and work jobs while taking classes, students from lower income quintiles are considering college to be “a test of their endurance rather than their intelligence”.

By obtaining an education, individuals with low economic status can increase the income potential and therefore earn more than their parents and possibly surpass those in the upper income quintiles. Overall, each additional level of education an individual achieves whether it be a high school, college, graduate, or professional degree can add greatly to income levels. On the other hand, there are reports that disagree with the idea that individuals can work hard, obtain an education and succeed because there is the notion that America is actually getting poorer and actually more likely to stay poor as compared to any other western country. Some claim that the idea of the “American Dream” is starting to fade since the middle-class family income has remained constant since 1973. But upward mobility clearly still exists. One study claims that economic mobility is 3 times stronger in Denmark, 2.5 times higher in Canada, and 1.5 times higher in Germany as compared to the United States.