Daniel Lemire's blog

, 5 min read

College and inequality

Most college professors are squarely on the left ideologically. They believe that part of their mandate is to reduce inequality, by helping to provide college degrees to all who qualify.

This always felt as strange to me. Higher education is highly subsidized, but the money goes overwhelmingly to people who are better off than average. So if you are a young adult, you either go find work, in which you will probably end up paying taxes… or else you attend college, in which case you will receive net benefits.

You are much more likely to go to college, and thus receive government subsidies if you are from a wealthier family. Moreover, you are more likely to go to college, and be subsidized, if you inherited from characteristics that are likely to turn you into a sought-after professional.

It does not stop there. Subsidies overwhelmingly go to elite schools. For example, in 2008, Princeton and Harvard received $105,000 and $48,000 in tax benefits per student.

We find an insane wealth concentration among the elite universities. The top 10 schools in the USA account for 5 percent of the world’s 211,275 people worth $30 million or more.

The lowly community college receives much, much less than elite schools. It should be clear that through higher education, governments subsidize the privileged.

But, at least, some students from modest backgrounds make it to good universities. However, it is far from clear that they will reap the same benefits as the well-off students. Elizabeth Armstrong and Laura Hamilton wrote a book Paying for the Party. In their book, they examine how well college serves the poorest students. To the question “What happened to the working-class students you studied?”, they answer “On our floor, not one graduated from the university within five years.” And what about the well-off students? “They were able to recreate their parents’ success. They all graduated.” But maybe college at least allows people from a modest background to rub shoulders with well-off students? The researchers found that “cross-class roommate relationships were extremely negative for the less privileged person”.

Where do you think well-off young people fall in love? In colleges. If you care at all about inequality, then you should care about assortative mating. One of the most important factor in determining your future earnings is who you mate with. Elite colleges act as subsidized mating grounds for the privileged. So it is not just the subsidies to elite colleges go to the privileged, it also helps create and sustain assortative mating, a powerful driver for inequality.

And let us not forget age. Most elite colleges will actively discriminate against you if you are older and uneducated. If you are 40 and a truck driver, and you find yourself out of a job, don’t bother applying at Princeton, even if you had great grades in high school. Age is a mediating factor: people from more modest backgrounds tend to have false starts. If you discriminate against people because they had false starts, you are effectively discriminating against them because they come from a more modest background.

I am not concerned about inequality, but if I were and I thought that governments should subsidize higher education, then I would favor the following policies:

  • I would check that people from the lowest quintile receive benefits from higher-education subsidies that are larger than the benefits received from top 1%. Given that children from the last quintile rarely attend college at all, and when they do they rarely graduate, while children from the top 1% mostly attend college and mostly graduate, this would be a harsher requirement to meet than might appear.
  • Assuming that higher-education should be subsidized at all, then it should be subsidized in reverse ranking. Highly accessible community colleges should receive more from the state per student than elite schools. Students from the lowest quintile should receive the bulk of the support and funding.
  • Government subsidies should favor low-income students and the graduation of low-income students. I would never subsidize a school for providing to the well-off students.
  • I would subsidize more generously adult education.
  • I would not subsidize Harvard or Princeton at all. Their endowments should be taxed and the income used to pay for better community colleges.

So you would think that activists on the left would have this agenda already. If you are going to “Occupy Wall Street”, you should certainly be concerned that Harvard’s $35 billion endowment is allowed to profit tax-free, and that the benefits go mostly to the elite. Why is there no call to redistribute these endowments?

Let us look at the intellectuals on the left. We have David Graeber, who helped spur the Occupy Wall Street movement. Graeber was a professor at Yale and is now a professor at the London School of Economics. Both schools that received students from well-off families and hand degree to people who are going to join the top 1%. At the London School of Economics, we also find Thomas Piketty, who became famous for his socialist treaty, Capital in the Twenty-First Century. It is interesting that these intellectuals do not choose to work for schools where blue-collar workers are likely to send their children. They are nowhere to be seen at community colleges or vocational schools. How likely is it that Graeber and Piketty would be eager to teach at a community college or at an adult-education school?

It is not just the USA and England. In Canada, the most elite schools, the less likely to cater to children who have minimum-wage parents, also receive the best government funding.

So the idea that subsidized colleges are a force of equality is flat out wrong. At best, they do well by the middle class. Let us at least be honest about it.