Income Segregation and Intergenerational Mobility Across Colleges in the United States

In a paper released in February 2020 entitled "Income Segregation and Intergenerational Mobility Across Colleges in the United States," John Friedman and colleagues used anonymized data from the federal government to publish statistics for each college in the U.S. on the distribution of students' earnings in their thirties and their parent's incomes.

Throughout conducting their research on the undermatching of college students, John Friedman, along with Raj Chetty of Harvard; Emmanuel Saez and Danny Yagan of the University of California, Berkeley; and Nicholas Turner of the Federal Reserve, focused on three statistically-fueled facts. First, the degree of segregation by parental income is very high across colleges, similar to levels of segregation across neighborhoods in the average American city. Second, children from low and high-income families who attend the same college go on to have relatively similar levels of earnings in adulthood. Third, colleges with high levels of student earnings (e.g. Ivy League colleges) typically have few students from low-income families, limiting their scope to serve as ladders for upward mobility. Building on these earlier findings, the researchers studied how much of a difference in the types of colleges that children from low vs. high-income families attend is explained by differences in their qualifications when they apply to college. They then analyzed the extent to which changes in the college application and admission process could reduce segregation by parental income across colleges and increase intergenerational income mobility. Friedman and his colleagues studied these questions by using data on students’ ACT and SAT test scores as a proxy for their pre-college qualifications. Although test scores do not capture all aspects of student’s qualifications, they are strong predictors of student earnings, even for students from the same socioeconomic background, and hence serve as simple, summary measure of pre-college credentials.