Earlier this week PEW released its most recent report: “Pursuing the American Dream Economic Mobility Across Generations”. Findings from the report state that, “While 84 percent of Americans have higher family incomes than their parents did at the same age, those born at the top and bottom of the income ladder are likely to stay there as adults.” However, in the section titled “Mobility by Education”, readers learn that obtaining a college degree just may be the necessary catalyst to help individuals climb the income ladder.
The report states that, “A four-year college degree promotes upward mobility from the bottom and prevents downward mobility from the middle and top”.
Key findings include:
• “47% of those raised in the bottom quintile of the family income ladder who do not earn a college degree are stuck there as adults, compared with 10% who do earn a college degree.”
• “Having a college degree makes a person more than three times more likely to rise from the bottom of the family income ladder all the way to the top”
• “39% raised in the middle of the family income ladder who do not get a college degree fall from the middle, compared with 22% of those with a degree”
• “51% of those with a college degree raised at the top [of the income ladder] stay there compared with a 25% of those without a college degree”
The report also explains how the wage premium associated with a college degree has risen dramatically during the past generation. The report explains how “increased returns on education directly translate into upward absolute mobility gains”. This means that people are earning more for having a college degree.
These findings connect directly to those of CEOs for Cities’ Talent Dividend research. CEOs’ Talent Dividend asserts that per capita income and college attainment rates are closely correlated.
Our research shows:
• Each additional percentage point improvement in aggregate adult four-year college attainment is associated with a $763 increase in annual per capita income
• Raising the national median of the top 51 metro areas from 29.4 percent to 30.4 percent would be associated with an increase in income of $124 billion per year for the nation
PEW’s “Pursuing the American Dream” report validates the sentiment behind CEOs for Cities’ Talent Dividend, providing the most up-to-date research on the connection between college degrees and income mobility.
