Education Isn’t the Key to a Good Income
One of the most commonly taught stories American schoolchildren learn is that of Ragged Dick, Horatio Alger’s 19th-century tale of a poor, ambitious teenaged boy in New York City who works hard and eventually secures himself a respectable, middle-class life. This “rags to riches” tale embodies one of America’s most sacred narratives: that no matter who you are, what your parents do, or where you grow up, with enough education and hard work, you too can rise the economic ladder.
A body of research has since emerged to challenge this national story, casting the United States not as a meritocracy but as a country where castes are reinforced by factors like the race of one’s childhood neighbors and how unequally income is distributed throughout society. One such study was published in 2014, by a team of economists led by Stanford’s Raj Chetty. After analyzing federal income tax records for millions of Americans, and studying, for the first time, the direct relationship between a child’s earnings and that of their parents, they determined that the chances of a child growing up at the bottom of the national income distribution to ever one day reach the top actually varies greatly by geography. For example, they found that a poor child raised in San Jose, or Salt Lake City, has a much greater chance of reaching the top than a poor child raised in Baltimore, or Charlotte. They couldn’t say exactly why, but they concluded that five correlated factors—segregation, family structure, income inequality, local school quality, and social capital—were likely to make a difference. Their conclusion: America is land of opportunity for some. For others, much less so.
A new working paper authored by the UC Berkeley economist Jesse Rothstein builds on that research, in part by zeroing in on one of those five factors: schools. The idea that school quality would be an important element for intergenerational mobility—essentially a child’s likelihood that they will one day outearn their parents—seems intuitive: Leaders regularly stress that the best way to rise up the income ladder is to go to school, where one can learn the skills they need to succeed in a competitive, global economy. “In the 21st century, the best anti-poverty program around is a world-class education,” Barack Obama declared in his 2010 State of the Union address. Improving “skills and schools” is a benchmark of Republican House Speaker Paul Ryan’s poverty-fighting agenda.
Indeed, this bipartisan education-and-poverty consensus has guided research and political efforts for decades. Broadly speaking, the idea is that if more kids graduate from high school, and achieve higher scores on standardized tests, then more young people are likely to go to college, and, in turn, land jobs that can secure them spots in the middle class.
Rothstein’s new work complicates this narrative. Using data from several national surveys, Rothstein sought to scrutinize Chetty’s team’s work—looking to further test their hypothesis that the quality of a child’s education has a significant impact on her ability to advance out of the social class into which she was born.
Read more at The Atlantic.