What’s the most effective tool to improve economic mobility in California?
Higher minimum wage? No.
Mandatory employment benefits? Nope.
Higher redistributive taxes? Nada.
It’s the California State University and community colleges.
According to a landmark study for the Equality Opportunity Project, Stanford’s Raj Chetty and coauthors found that certain state and community colleges offer effective pathways to higher incomes for younger generations.
By looking at the mobility rate of every college in America, the authors found that highly selective colleges do well in channeling children from low- or middle-income families to the top 1 percent of the income distribution, but in one of the study’s most compelling findings — the colleges with the highest upward mobility rates are typically mid-tier public schools that have both large numbers of low-income students and very good earnings outcomes.
Of the top ten colleges in the country with the best mobility rates, three are in California: top-ranked Cal State Los Angeles, Glendale Community College and Cal Poly Pomona.
The national average mobility rate for all colleges is 1.7%. Mobility rates for the top-three California colleges are four to six times higher than the national average for all colleges.
College “mobility rate” is defined as the fraction of its students who come from families in the bottom fifth of the income distribution and end up in the top fifth bracket in their early 30s. Specifically, it takes into account both access the college provides to students and the student’s ultimate earnings success.
According to Chetty, a “worrisome trend” is dropping rate of low-income students attending institutions with the highest mobility rates. “These findings raise the concern that the mid-tier public colleges that may have offered many low-income students pathways to success are becoming less accessible to such students,” states the study.
The lesson to California policy makers is that best tool for social and economic progress remains our vast higher education system.
The Equality of Opportunity Project is a joint academic-philanthropic effort aimed at using big data to improve economic opportunities and upward mobility for children. I reported on earlier findings from the project on trends in mobility for current young workers compared with earlier generations.