Low-Income Students May Benefit Less From Bachelor’s Degrees
Posted By Eliana Osborn on April 5, 2016 at 9:33 am
Economists at the W.E. Upjohn Institute for Employment have found that the story we’ve been telling students all these years may not be true – at least not for all students. Yes, earning a college degree increases your lifetime earnings. But for those who start out at the bottom of the economic ladder, a degree boost may not be as big a boon as for others.
Writing for Brookings, Brad Hershbein compared student and parent lifetime earnings, adjusted for education level. He found that those who start at a lower economic status don’t get the same bump in income as those already in the middle class, even when they earn an equivalent degree.
According to Hershbein, “College graduates from families with an income below 185 percent of the federal poverty level (the eligibility threshold for the federal assisted lunch program) earn 91 percent more over their careers than high school graduates from the same income group. By comparison, college graduates from families with incomes above 185 percent of the FPL earned 162 percent more over their careers (between the ages of 25 and 62) than those with just a high school diploma.
We already know that a racial gap exists in wealth and employment, despite education levels. But the promise of a college education as the great equalizer, allowing smart and hardworking students from all walks of life to get ahead, does not appear to be holding up under scrutiny.
A 2014 report from the Pew Research Center looked at earnings for all college graduates: “In 2009 (the latest year available) the median monthly earnings of young adults with a bachelor’s degree and no further education was $3,836, a 13% increase from 1984 ($3,399), according to the Census Bureau’s Survey of Income and Program Participation (SIPP).” Earnings have grown even more for those with more advanced degrees. Still, Pew notes that earnings vary widely by field of study.
Increased funding for Pell grants and other programs to help low-income students access college has been a major focus of the Obama administration. And poor youth in America are disproportionately non-white, making the issue one of race as well as class. If earning a degree is not as valuable for these students, what other factors might be in play?
Over time, according to Hershbein’s data, the gap between low-income and middle class family-of origin earners grows. “Bachelor’s degree holders from low-income backgrounds start their careers earning about two-thirds as much as those from higher-income backgrounds, but this ratio declines to one-half by mid-career,” according to the report. Possible explanations for some of this difference may include the resources students are given early on in education, as well as the colleges students choose to attend and where they grew up.