Looking at intergenerational economic mobility, a study from the Pew Charitable Trusts’ Economic Mobility Project shows that a college education is a major factor in making the upward mobility of the American Dream a reality. The authors of Pursuing the American Dream: Economic Mobility Across Generations write that a four-year college degree not only supports mobility from a lower economic group to a higher one, it also prevents downward mobility for people in the upper and middle economic groups.
The study divided people into groups based on individual and family income and wealth, then compared them to the individual and family income and wealth of the subjects’ parents. Family income is the amount the family makes yearly, while family wealth is the amount a family has saved. For subjects raised at the bottom of the family income ladder, nearly half (47 percent) without a college degree are stuck there as adults, compared with 10 percent with a college degree. Similarly, 45 percent without a degree are stuck at the bottom of the family wealth ladder, compared with 20 percent with a degree. A four-year degree also makes it more likely that a subject will rise from the bottom of the ladder all the way to the top–over three times more likely for family income and over four times more likely for family wealth.
These findings are especially important because, as the study’s authors say, family income and wealth at the ends of the spectrum are “sticky.” That is, it highly likely that someone raised in the bottom group of income and wealth will remain there. One of the best ways to decrease this phenomenon’s effect is a college education.
A college education is also protective against downward mobility. At the top of the family income ladder, over half (51 percent) of those with a college degree raised at the top stay there compared with a quarter of those without a college degree. Thirty-nine percent without a college degree fall from the middle compared with only 22 percent with a degree. Similar patterns exist for family wealth.
The study also compared absolute mobility (whether subjects had more income than their parents) with relative mobility (whether subjects were able to move up in income groups) and economic mobility for Blacks with mobility for Whites.
Read the full study here (PDF).