Growing income and gender gaps in college graduation

A new study shows that the gap in rates of college completion between students from high-and low-income families has grown significantly in the last 50 years.

"We find growing advantages for students from high-income families," said University of Michigan economist Martha Bailey, who conducted the study with U-M economist Susan Dynarski. "And we also find that increases in educational inequality are largely driven by women."

Bailey and Dynarski analyzed nearly 70 years of data on postsecondary education from the U.S. Census and the National Longitudinal Surveys of Youth. Their findings were included as a chapter in the book "Whither Opportunity? Rising Inequality and the Uncertain Life Chances of Low-Income Children," published this year by the Russell Sage Foundation. They were also issued this month as a working paper by the National Bureau of Economic Research.

For their analysis, the researchers compared the educational attainment of those born between 1961 and 1964 (who were college age in the early 1980s) to those born between 1979 and 1982 (who were college age in the early 2000s), by family income at the time children were between fifteen and eighteen years old.

They found that 54 percent of those who went to college in the early 2000s and who were from families in the top income category graduated from college, fully 18 percentage points more than college-age students in the same income group twenty years earlier. In contrast, college completion rates for those in the lowest income group increased only slightly over the same period, from 5 percent to 9 percent.

"Growing inequality in college graduation rates happened during a period when education became increasingly important for subsequent earnings," Dynarski said.

The U-M researchers also found that inequality in educational attainment has risen more sharply among women than among men. For those entering college in the 1980s, the gap between men and women was small: about 2 percent more females in the top income group graduated from college than did males; and about 2 percent fewer females in the lowest income group graduated than did males. But for those entering college in the 2000s, the gender gap widened significantly especially at the top of the income distribution, with 13 percent more women than men in the highest income group graduating from college.

This female advantage in educational attainment is not a new phenomenon, the researchers point out. More women than men graduated from college in all birth cohorts since 1950. But the gap has grown recently, with the overall college graduation rate for women now ten points higher than the rate for men–32 percent compared to 22 percent.

The recent increase in women's college graduation reflects rapid achievement gains among women from upper-income families who have outperformed their brothers, according to Bailey. Why this is the case is not entirely clear.

Whatever the reasons for the growing gender gap in college graduation, the growing income gap has some clear policy implications, according to the authors.

"Inducing more low-income youth into college will not, by itself, serve to close income gaps in educational attainment," they conclude. "Even if rates of college entry were miraculously equalized across income groups, existing differences in persistence would still produce large gaps in college completion."

Bailey is an assistant professor of economics in the U-M College of Literature, Science, and the Arts (LSA) and a faculty associate at the U-M Institute for Social Research (ISR). Dynarski is an associate professor at the U-M Gerald R. Ford School of Public Policy, and the U-M School of Education, and also holds appointments in the Department of Economics and ISR.