Stanford research analyzes colleges as engines of upward mobility

Certain state and community colleges – such as the California State colleges (California State University system) and the City University of New York – offer pathways to higher incomes for the country’s younger generations, according to a new study by Stanford researchers and others that examines the “mobility rate” of every college in America.

Highly selective colleges do well in channeling children from low- or middle-income families to the top 1 percent of the income distribution, but one of the study’s most compelling findings is that the colleges with the highest upward mobility rates are typically mid-tier public schools that have both large numbers of low-income students and very good earnings outcomes.

“There are a lot of mid-tier schools that admit a lot of low-income kids and have very good outcomes,” said economics Professor Raj Chetty, a senior fellow at the Stanford Institute for Economic Policy Research and one of the study’s authors. “Those are the colleges we should be looking to as models as we think about how to give more kids pathways to upward mobility.”

The study defines a college’s upward mobility rate as the fraction of its students who come from families in the bottom fifth of the income distribution and end up in the top fifth in their early 30s. Specifically, it takes into account both the number of low-income students attending a school and the “success” rate at which that cohort of students later moves into the top 20 percent of wage earners. Those earning more than $58,000 in adjusted incomes for 2014 are in that top bracket.

The study is the first to provide such a comprehensive statistical analysis for 2,187 American colleges, using anonymized tax records covering college students from 1999 to 2013 and building on the Department of Education’s College Scorecard. Along with Chetty, the authors are John Friedman of Brown University; Emmanuel Saez and Danny Yagan of the University of Caifornia, Berkeley; and Nicholas Turner of the U.S. Treasury.

Mobility rates vary substantially across colleges because of their vast differences in levels of low-income students. So even though elite private colleges exhibit the highest success rates – with almost 60 percent of students from the bottom fifth of the income distribution reaching the top fifth – their relatively small numbers of low-income students bring down their overall upward mobility rates.

On the other hand, certain less selective universities have high success rates but offer much higher levels of access to low-income families.

For instance, public schools dominate the study’s list of top 10 colleges with the highest mobility rates, and all are located within California, New York and Texas. Their mobility rates range from about 7 percent to 9 percent – well above the national average rate of 1.7 percent.

These mid-tier public colleges have high mobility rates while spending significantly less per student – about $5,500 as opposed to $80,000 per student at the most selective private universities – and could provide the most scalable educational model for increasing upward mobility, according to the study.

The study does not provide guidance on how a given child would do if he or she were to attend a different college, as the reported differences in outcomes across colleges partly reflect variation in the abilities and ambitions of students who attend different colleges.

However, “we hope the college-level statistics released here will be used to identify and expand access to colleges that provide pathways to upward mobility throughout America,” the authors wrote in an executive summary of the study.

An interactive tool showing where each American college stands in terms of parental incomes of its enrollees and the earnings outcomes of its students is featured in a New York Times article on the study.

An “encouraging” finding, Chetty noted, is how students from low- and high-income families within any given college have similar outcomes – children from poor families show earnings levels nearly as high as those from rich families.

“In this sense, colleges successfully level the playing field for students with different socioeconomic backgrounds,” he said.

“The question then becomes: How can you increase access going forward for kids of low-income families?”

In what Chetty called a “worrisome trend,” the rate of low-income students attending institutions with the highest mobility rates, such as Stony Brook University in New York or Glendale Community College in California, has dropped sharply since 2000.

“These findings raise the concern that the mid-tier public colleges that may have offered many low-income students pathways to success are becoming less accessible to such students,” the study states.

And despite efforts over the past decade by highly selective private universities to increase access and provide generous financial aid, students from the poorest families are still particularly underrepresented, the study finds. Children with parents who rank among the richest 1 percent of the nation’s earners are 80 times more likely to attend an Ivy League school than children in the bottom fifth of the income distribution, the study states.

The paper is the latest by The Equality of Opportunity Project, an effort involving various collaborators and led by Chetty, Harvard economist Nathaniel Hendren, and Brown economist John Friedman to conduct economic research for policies that can promote upward mobility. In previous work, the group found that a child’s environment plays a key role in breaking cycles of poverty – the earlier, the better.

“These are all interconnected pieces,” Chetty said. “From our earlier work, we know that upward mobility is shaped going all the way back to childhood, so a potential idea here is to try to target kids earlier than at the end of high school” – which is the typical focal point of the college-admissions process.

While the new paper doesn’t identify what’s exactly behind the colleges that it calls “potential engines of mobility” – whether they admit different types of students or provide more effective instruction – it concludes that further studies along these lines are warranted.

More research, it states, could also uncover better ways to expand financial aid, or even other interventions, such as changing admission criteria, to effectively improve access.

“We don’t have the answer yet in terms of how to increase upward mobility,” Chetty said, “but we’re hoping this data, which provides fine-grained information for every college in America, will give people a much better way to understand what actually works and what could change these trends.”