Growing class inequality in education

In a New York Times article with the headline "For Poor, Leap to College Often Ends in a Hard Fall," Jason DeParle writes:

Angelica Gonzales marched through high school in Goth armor — black boots, chains and cargo pants — but undermined her pose of alienation with a place on the honor roll. She nicknamed herself after a metal band and vowed to become the first in her family to earn a college degree.

Weekends and summers were devoted to a college-readiness program, where her best friends, Melissa O’Neal and Bianca Gonzalez, shared her drive to “get off the island” — escape the prospect of dead-end lives in luckless Galveston. Melissa, an eighth-grade valedictorian, seethed over her mother’s boyfriends and drinking, and Bianca’s bubbly innocence hid the trauma of her father’s death. They stuck together so much that a tutor called them the “triplets.”

Low-income strivers face uphill climbs, especially at Ball High School, where a third of the girls’ class failed to graduate on schedule. But by the time the triplets donned mortarboards in the class of 2008, their story seemed to validate the promise of education as the great equalizer.

Angelica, a daughter of a struggling Mexican immigrant, was headed to Emory University. Bianca enrolled in community college, and Melissa left for Texas State University, President Lyndon B. Johnson’s alma mater. . . .

Four years later, . . . [n]ot one of them has a four-year degree. Only one is still studying full time, and two have crushing debts. Angelica, who left Emory owing more than $60,000, is a clerk in a Galveston furniture store.

Each showed the ability to do college work, even excel at it. But the need to earn money brought one set of strains, campus alienation brought others, and ties to boyfriends not in school added complications. With little guidance from family or school officials, college became a leap that they braved without a safety net.

The story of their lost footing is also the story of something larger — the growing role that education plays in preserving class divisions. Poor students have long trailed affluent peers in school performance, but from grade-school tests to college completion, the gaps are growing. With school success and earning prospects ever more entwined, the consequences carry far: education, a force meant to erode class barriers, appears to be fortifying them.

“Everyone wants to think of education as an equalizer — the place where upward mobility gets started,” said Greg J. Duncan, an economist at the University of California, Irvine. “But on virtually every measure we have, the gaps between high- and low-income kids are widening. It’s very disheartening.”

The growing role of class in academic success has taken experts by surprise since it follows decades of equal opportunity efforts and counters racial trends, where differences have narrowed.

If the "experts" are so surprised, perhaps they should rethink their assumptions.

Rubio and Ryan try to kill Romney's "47%" line

Marco Rubio and Paul Ryan gave speeches last night "delivering an implicit, but sharp, rebuke to Mitt Romney's '47 percent' line." I like this point:

“Every country has rich people, but only a few places have achieved a vibrant and stable middle class,” Rubio added, calling it a “fundamental promise of America” to have the opportunity to make it to the middle class.

Is Romney wrong about economic mobility in the United States?

In a Washington Post editorial, Ruth Marcus writes that Mitt Romney is presenting a "Fantasyland version of the American Dream." According to Marcus, Romney claims that

all it takes to succeed in this country is determination and hard work. Government merely needs to get out of the way, roust the Entitlement Society slackers and let the Opportunity Society strivers go for it.

“Frankly, I was born with a silver spoon, which is the greatest gift you could have, which is to get born in America,” Romney told donors at the now-famous Florida fundraiser. “I’ll tell you ... 95 percent of life is set up for you if you’re born in this country.”

Describing his own path, Romney noted that he gave away the money his father left him. “I have inherited nothing,” he said. “Everything I earned I earned the old-fashioned way.”

There’s only one thing wrong with this cozy, self-satisfied worldview: It omits the enormous advantages accruing to those born on third base. It ignores the grim reality that those born to less-privileged families are far less likely than the Bushes or Romneys of the world to secure their place in the middle class or above.

It imagines an America where economic mobility is far more fluid than it is in reality. Being born in America is an advantage, to be sure, but some spoons are a lot more sterling than others.

A new study from the Brookings Institution’s Center on Children and Families underscores Romney’s misperception. “The reality is that economic success in America is not purely meritocratic,” write authors Isabel V. Sawhill, Scott Winship and Kerry Searle Grannis. Rather, they say, “It helps if you have the right parents. Those born into rich or poor families have a high probability of remaining rich or poor as adults.”

This seems to be flawed reasoning. The statement in that last paragraph assumes that merit is randomly distributed throughout the population. But that's not the only plausible theory. How about this alternate theory? Parents earn their money through their actions. They took those actions because of some combination of their genes and their environment (including how they were raised by their parents). The parents obviously pass on their genes to their children, and they can also pass on some of their upbringing by raising their kids to share their values and so on. The children will tend to act in similar ways to their parents. In short, parents can pass on their "merit" to their children. If that's correct, then in a meritocracy, you'd expect a person's level of economic success to be fairly similar — although far from identical — to their parents.

And that's what the study shows:

People do move up and down the ladder, both over their careers and between generations, but it helps if you have the right parents. Children born into middle-income families have a roughly equal chance of moving up or down once they become adults, but those born into rich or poor families have a high probability of remaining rich or poor as adults. The chance that a child born into a family in the top income quintile will end up in one of the top three quintiles by the time they are in their forties is 82 percent, while the chance for a child born into a family in the bottom quintile is only 30 percent. In short, a rich child in the U.S. is more than twice as likely as a poor child to end up in the middle class or above.

As Tyler Cowen wrote in a blog post called "Why Economic Mobility Measures are Overrated" (which I've blogged twice before):

How much of immobility is due to “inherited talent plus diminishing role for random circumstance”? Is not this cause of immobility very different — both practically and morally — from such factors as discrimination, bad schools, occupational licensing, etc.? What are you supposed to get when you combine genetics with meritocracy? I do not know how much of current American (or other) immobility is due to this factor, but I find it discomforting that complaints about mobility are so infrequently accompanied by an analysis of this topic.

Why do Americans have less income mobility than Europeans?

I linked to Tyler Cowen's post with 7 points about income mobility yesterday, and I mentioned that he speculates about that question. Here's what Cowen has to say (#4); I think this is a profound insight that doesn't get nearly enough attention:

Why do many European nations have higher mobility? Putting ethnic and demographic issues aside, here is one mechanism. Lots of smart Europeans decide to be not so ambitious, to enjoy their public goods, to work for the government, to avoid high marginal tax rates, to travel a lot, and so on. That approach makes more sense in a lot of Europe than here. Some of the children of those families have comparable smarts but higher ambition and so they rise quite a bit in income relative to their peers. (The opposite may occur as well, with the children choosing more leisure.) That is a less likely scenario for the United States, where smart people realize this is a country geared toward higher earners and so fewer smart parents play the “tend the garden” strategy. . . . “High intergenerational mobility” is sometimes a synonym for “lots of parental underachievers.”

Another thing (Cowen's point #7):

I would like all measurements [of income mobility] to take into account the pre-migration incomes of incoming entrants. Denmark, which doesn’t let many people in, is a much less upwardly mobile society once you take this into account. Sweden deserves more praise, and in general this factor will make the Anglo countries look much, much more supportive of mobility.

Tyler Cowen on Paul Krugman

"Paul Krugman is a great economist. But of all the people in my RSS feed, in terms of his quality and skill as a reader, he is not in the top 90 percent."

That's how Tyler Cowen concludes a reply to Krugman in their debate on income mobility.

(Here's Cowen's original post with 7 interesting points on income mobility, including speculation about why it's higher in Europe than in the US, and here's Krugman's response suggesting that Cowen's post is "anti-American.")

One of Cowen's co-bloggers, Alex Tabarrok, also defends Cowen. He gives three elegant hypotheticals which lead him to conclude that "economic mobility measures are overrated. What we should care about is growth." Whether or not you're not predisposed to agree with that view, I recommend clicking the link and considering Tabarrok's hypos.

Relatedly, here's a column by Thomas Sowell on income mobility. Excerpt:

All sorts of statements are made in politics and in the media as if that top 1 percent is an enduring class of people, rather than an ever-changing collection of individuals who have a spike in their income in a particular year for one reason or another. Turnover in other income brackets is also substantial.

There is nothing mysterious about this. Most people start out at the bottom, in entry-level jobs, and their incomes rise over time as they acquire more skills and experience.

Politicians and media talking heads love to refer to people who are in the bottom 20 percent in income in a given year as “the poor.” But, following the same individuals for 10 or 15 years usually shows the great majority of those individuals moving into higher income brackets.

The number who reach the top 20 percent greatly exceeds the number still stuck in the bottom 20 percent over the years. But such mundane facts cannot compete for attention with the moral melodramas conjured up by politicians and the media when they discuss “the rich” and “the poor.”

There are people who are genuinely rich and genuinely poor, in the sense of having very high or very low incomes for most, if not all, of their lives. But “the rich” and “the poor” in this sense are unlikely to add up to even 10 percent of the population.

For more of this, I recommend the chapter on income in Sowell's book Economic Facts and Fallacies.