The College-Educated Are Getting Richer....
From columnist Star Parker: According to "Education and Economic Mobility," by Brookings Institution scholar Ron Haskins, the inflation-adjusted median family income for adults ages 30-39 with a graduate degree was 80% higher in 2006 ($90,000) than in 1964 ($50,000). For those with a four-year college degree, it was almost 60% higher ($75,000 vs. $50,000). But incomes for those with a high school education or less have remained virtually unchanged over the same period (see chart above, click to enlarge). Stated otherwise, the gap in real family income between adults with a graduate degree and those with only a high school diploma is four times as great today ($40,000 difference in median income) as 40 years ago ($10,000 difference in median income).
Comment: To the extent that there is rising income inequality, it appears that much of the inequality is due to the increasing gains to education over time. It's not the "rich are getting richer and the poor are getting poorer" as much as it's "the college-educated are getting richer in an Information Age Global Economy, and the high school-educated are staying the same."
6 Comments:
Must have taken a brain surgeon to figure that one out.
The Democratic Party could apparently use a few more brain surgeons.
What does "median family income" mean? Could it not be that people with graduate degree have become more likely to be in dual-income families, and that median personal income has not increased?
I notice that this article is reporting income by family. Last month the NYT did an article "You Are What You Spend."
www.nytimes.com/2008/02/10/opinion/10cox.html?ex=1360299600&en=9ef4be7de32e4b53&ei=5090&partner=rssuserland&emc=rss&pagewanted=all
Concerning income quintiles by household:
“Richer households are larger — an average of 3.1 people in the top fifth, compared with 2.5 people in the middle fifth and 1.7 in the bottom fifth.”
Using “Professional graduate degree” as a proxy for the most wealthy and “Less than high school” of the least wealthy, and assuming household size is roughly equivalent to family size, for 2005 we get:
Highly Educated: 90,000/3.1 = $29,032 per capita
Drop Out: 29,000/1.7 = 17,059 per capita
That’s a ratio of 1.7:1. instead of 3:1
There has been a significant increase in the number of single adults living alone and single parents as head of household. Where there is a married couple, there has been an increase in the number families with both spouses earning an income. It makes me wonder how much impact family size has had over time and by grouping.
But of course, family income and education level are correlated. Skill-biased technological change makes the rich richer when those who have skills also have wealth. Just look at Figure 7 of this Brookings report; 53% of children from families with income in the top quintile get a college degree, while only 11% of children from families with income in the bottom quintile get one.
The Brookings paper does a good job of showing how education can lead to income mobility, but to say that the "college-educated get richer" story and the "rich get richer" story are at odds ignores the evidence at hand. As Haskings says on page 7, "Substantial differences in educational attainment remain...with children from low-income families trailing."
And oh yeah, the income of those with less than a high school education (disproportionately poor) has decreased according to this graph. So the "poor getting poorer" story might not be complete poppycock, although CD's previous comment that the poor/poorly educated of today aren't the same people as the poor/poorly educated of yesteryears offers valid criticism of the "poor getting poorer" story.
Money and longevity. Now that's the ticket!
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