There has always been debate surrounding whether education, a family’s social standing, parental income, and other factors can affect the chances of success and higher social and economic mobility in later life.
Studies have shown that individuals provided with a better opportunity structure go on to earn higher salaries and increase their upward social mobility. It therefore raises the bold question of whether America’s elite are born or made?
The Economist newspaper recently dissected a report where a team of experts from the Department of Education looked at 30 million tax returns to determine how earnings vary per parental income. Economists found that family background is the most important factor in socio-economic mobility in the United States. Results in this particular report showed that those brought up with a “household income in the lowest fifth has a one-in-ten chance of reaching the top fifth of earnings themselves. This is just half what would be seen if parents did not pass any earnings advantage on to their children”.
However, the report found that students from low income families are still able to reach the upper-middle classes if they attend an elite university. For example, a graduate from one of the Ivy League institutions have roughly a “two-thirds chance of making it into the top 20%”.
But, it is extremely difficult to get into one of the elite universities and breaking into the top one percent is almost impossible. For the few, they can squeeze in through pure hard work and determination, while others with a more privileged background breeze in without issue sometimes because relatives that happen to be Ivy alumni.
A study by Pews found that the correlation between parents’ income and their children’s income is undeniable. Results show that “43% of children born into the bottom quintile remain in the bottom as adults” and “40% of children raised in the top will remain there as adults”. Alternatively, only “4% of those raised in the bottom moved up to the top quintile as adults”. Therefore, results prove that opportunity structures provided by families do determine a future generation’s success.
Socio-economic mobility is fundamentally important to building a better society and can be determined by many different factors including: family wealth, race, sexuality, color, location, religion, genetics, culture, education and connections. Although the likes of Bill Clinton and Benjamin Franklin made their way from working-class backgrounds to the White House, it is usually the elite who stick together in their social circles to produce future presidents, banking billionaires and leading public figures. Even though economic positioning has been determined as one of the most important factors in leveraging your way to the elite division, education is equally as important.
It has been proven time and time again that college graduates can indeed climb the corporate ladder, more so than those without a top education. Education has been a key to socio-economic mobility in America since the great income inequality during the industrial revolution, and this viewpoint has not waivered.
Americans are brought up to believe that a college degree brings access to better opportunities and a better life, and this has been the case especially those from poorer backgrounds. But, with more and more students aiming for a college degree and fewer jobs on the market, is a college education alone enough to fulfil the American dream?
Economists, experts and educators have debated this very subject over recent years, and have reached varying conclusions. Therefore, Bold Business dives deeper first into whether education is the key determinant to economic and social mobility in the United States, in part two of our economic and social mobility series.