Research Network on Intergenerational Mobility

Going to college has long conferred a large wage premium. We show that the relative premium received by lower-income college-goers has halved since the 1960s. We decompose the steady rise in American higher education’s regressivity using dozens of survey and administrative datasets that document 1900–2020 wage premiums and the composition and value-added of collegiate institutions and majors. Three trends explain two-thirds of rising collegiate regressivity. First, the less-selective and public institutions that disproportionately enroll lower-income students have declined in economic value. Second, lower-income students are increasingly over-represented in America’s shrinking community college sector since 1990. Third, higher-income students have driven declining humanities enrollment and expanding computer science enrollment since the 2000s, increasing their degrees’ value. Differential selection and shifts between four-year institutions are second-order. College-going provided equitable returns before 1960, but collegiate regressivity has curtailed higher education’s potential to reduce inequality and mediates 25 percent of intergenerational income transmission.