There’s no doubt that post-secondary education is expensive. Data released in June from the National Center for Education Statistics shows undergraduate tuition, fees, and room and board costs have increased 42% at public universities, and 31% at private institutions, since 2000. But new research conducted by The Pew Charitable Trusts shows the return on investment of a college degree may be even more promising than previously thought—without earning one, upward economic mobility is highly unlikely.
The research, compiled into “Pursuing the American Dream: Economic Mobility Across Generations,” is part of Pew’s Economic Mobility Project. It looked at the ways in which economic mobility, both upward and downward, is affected by family income, family wealth, individual race, and individual income.
Without question, a four-year college degree promotes upward mobility and prevents downward mobility, according to the research. Though 57% of Americans raised in the bottom 20% income range do not move past it, a college degree makes upward mobility significantly more likely. Nearly half, 47%, of those without a degree who were raised in the lowest quintile stay there, but only 10% of those who earn a degree remain in the lowest income bracket. Having a college degree makes people more than three times more likely to rise from the bottom 20% of the income ladder to the top.
Of those raised in the middle income brackets, 39% of people who do not get a college degree move down the income ladder; only 22% of those with a degree move down. At the top of the income ladder, 51% of those with a college degree remained at the top, whereas only 25% of those raised in the highest income bracket who do not have a college degree remained in the top income bracket.
The study found that while most Americans – between 60% and 96%, depending on income level and degree attainment – earn more money than their parents, higher education plays a key role in the ability to move up a rung in the income ladder.
Race is also a significant factor, but less significant in mobility than education. The study found that while 89% of white Americans exceed the income level they were raised in, only 66% of black Americans do. While only 33% of white Americans raised in the bottom 20% of the income ladder remain there, 53% of black Americans raised in the bottom remain there. Of black Americans raised in the middle rung of the income ladder, 56% fall two rungs to the bottom; only 32% of white Americans do the same. Additionally, 50% of black Americans raised in the bottom rung of the ladder remain there, while only 33% of white Americans remain there.
Follow Anna Schumann on Twitter @ASchumannCMN.