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Chapter 10 Who Is Getting a College Education? Family Background and the Growing Gaps in Enrollment David T. Ellwood and Thomas J. Kane Although social scientists and policymakers have spent much of the last decade documenting and diagnosing the dramatic rise in the labor-market importance of education since 1980, they have devoted relatively little time to understanding its ramifications for other social phenomena, such as student financial aid policy and intergenerational mobility. Have the rising returns to education led to increased college-going by students from all backgrounds? Has the growing inequality been mirrored by a growing inequality in college enrollment, depending on family background? This chapter examines these questions, reporting on differences in college-going by family income and parental education and asking how these gaps have changed over time. We come to three conclusions. First, although differences in academic preparation account for much of the difference by family background, very large gaps remain in college-going by students from high- and low-income parents and from high- and low-education parents. Youth who appear to be similarly prepared academically when emerging from high school enroll in college at very different rates depending on their parents' income and education. Second, the role of family background in determining postsecondary training choices seems to have increased over time. As the payoff to education has increased, a larger share of the high-income youth have enjoyed the added advantage of having more educated parents. In other words, college enrollment rates have risen at the top income quartile not only because family income itself has become a more important predictor of who goes to college, but because differences in average parental education for those in the top and bottom income quartiles have widened as well. Both factors have contributed to the widening of income gaps. Third, the fact that equally prepared youth go to higher education at different rates seems to make a difference of between 5 and 10 percent in additional earnings later in life for students from more advantaged backgrounds. All else equal, any increase in the payoff to educational attainment is likely to increase the gap in expected earnings for high- and low-income youth. I 283 Securing the Future TRENDS IN COLLEGE RETURNS AND ENROLLMENT The old adage "To get a good job, get a good education," is more true today than at any time in a generation. Figure 10.1 portrays the trend in earnings differences by educational attainment for men and women ages twenty-five to thirty-four, working full-time, year-round, since 1967. The figure shows, in percentage terms, how much more college graduates earned than high school graduates did. During the late 1960s and early 1970s, the college premium actually fell for both men and women-prompting our colleague Richard Freeman (1976) to lament the plight of The Overeducated American. However, after 1978 the earnings difference associated with a college degree rose dramatically and has remained high. Whereas male college graduates in this age range were earning roughly 15 percent more per year in the late 1970s, they earn nearly 50 percent more today. The differential for women rose from 20 percent to nearly 60 percent. One would have expected college enrollment to move in tandem with returns to schooling if young people were responding to perceived economic rewards. And indeed, the trend in male college enrollment has closely matched the rise and fall in the payoff to college. Figure 10.2 shows that male college enrollment fell during the early 1970s, as the payoff to college was falling, and began rising again when the college wage premium rebounded in the late 1970s.1 FIGURE 10.1 / Premium for College Graduates Versus High School Graduates Working Full-Time, Year-Round, Ages Twenty-Five to Thirty-Four tn 70 ~ . , " , ..0 ' , '1:l 40 , , I.I 30 , ,


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