Many people are concerned about economic inequality. Many of these people work on university campuses. My experience is that the vast majority of the university professors, including those working at prestigious schools, believe that they are working toward a more egalitarian society.
I have reviewed this issue earlier this year in College and inequality. I believe that the case for colleges as agents of equality is much weaker than people expect, and the reverse case can be made with equal confidence. The tax breaks that Princeton and Harvard receives (tens of thousands of dollars per student per year) are not egalitarian.
This time, I want to examine more closely what the scholarship has to teach us.
In her book, Mettler (2014) argues that
our system of higher education not only fails to mitigate inequality but it exacerbates it.
Her book makes a comprehensive case. One of her argument is that well-off kids attend elite schools where they receive a much better deal. Elite schools are often much better funded, in part thanks to tax breaks and other forms of government favoritism. Poorer kids tend to attend lesser schools where they get a worse deal. This argument finds an echo in Carnevale and Strohl:
Selective colleges give bigger annual subsidies for each student’s educational program. For example, in 2006 private research universities provided $15,000 in non-tuition subsidy compared with a subsidy of $6,500 by community colleges. In order to hold or increase their prestige rankings, colleges compete by using their financial and capital resources to bid for students with the highest test scores. For example, economist Gordon C. Winston at Williams College reports that Williams had offered a college education that cost about $65,000 for a net price to students of about $20,000. The $45,000 subsidy for each student allows Williams to attract the student body with the highest test scores, thereby maintaining or increasing its prestige ranking and in turn maintaining or increasing ability to attract students with high test scores.
To this, one must add an important fact: if you are a kid from the top 1%, you are almost certain to graduate from college with a degree, even if you party all the time… kids of lesser families are much, much more likely to never graduate, and end up with leftover debts. See also the 2015 book by Armstrong and Hamilton, Paying for the Party: How College Maintains Inequality which I already covered.
Hershbein et al. (2015) say that you should not expect too much from education regarding inequality:
Increasing educational attainment will not significantly change overall earnings inequality. The reason is that a large share of earnings inequality is at the top of the earnings distribution, and changing college shares will not shrink those differences.
Keng et al. make an empirical observation that is not favorable to college as a force for equality of outcomes:
Between 1990 and 2014, Taiwan increased the college share of its labor force from 7 to 32 percent (…) Such a rapid surge in skill supply should suppress college wages and lower wage income inequality. Instead, wage inequality rose 7 percent since 1978. (…) The Taiwan case shows that increasing college access alone will not lower inequality.
What about the case for free tuition? Surely, that’s egalitarian? Maybe not:
(…) we study the English higher education system which has, in just two decades, moved from a free college system to one in which tuition fees are among the highest in the world. Our findings suggest that England’s shift has resulted (…) a narrowing of the participation gap between advantaged and disadvantaged students. (…) We conclude that tuition fees, at least in the English case supported their goals of increasing quality, quantity, and equity in higher education.