19 January 2017

Rich Kids Like The University of Colorado and Colorado College

The University of Colorado has a largest share of students with parents in the top 1% of income than any other public college in the nation (the University of Arizona and the University of Michigan are close runners up), and is neck and neck with the private colleges with the largest share of those students. The only private colleges with comparable shares of these very affluent students are N.Y.U. (the most popular private college for children of the top 1%), University of Southern California, and the University of Pennsylvania.  Even among the children of the top 1% less than half attend a college that is "Ivy Plus", "Elite" or "Highly Selective" (among the children of the top 0.1% it is under 60%).

Colorado College, meanwhile, has the second highest ratio of students in the top 1% of household income to students in the bottom 60% (second only to Washington University in Saint Louis). The parents of students at Colorado College have the highest median income ($277,500) of any college or university in the United States, bar none, and the second highest percentage of students in the top 1% of income (i.e. $630,000+) (24%) second only to Trinity College in Connecticut (with 26%). It is fourth in the percentage in the top 20% (i.e. $110,000+) at 78%. It is 2357th out of 2395 colleges in the percentage in the bottom 20% (i.e. less than $20,000 per year) at 2%.

For profit schools are disproportionately chosen by the poor despite their high tuitions and lousy results, and make up only a tiny percentage of the college choices of the affluent.

Low and middle income students who attend highly selective colleges earn only slightly less than their more affluent peers. The gap between a hypothetical student in the bottom 1% and the top 1% of family income who attend the same class of colleges is only about 5 percentile points at private college and about 10 percentile points at public colleges and is roughly linear. So, a student in the 60th percentile of family income is likely to have earnings about 2 percentile points lower than a student in the top 1% at a selective private college and about 4 percentile points lower than a student in the top 1% at a selective public college.

Overall the gap is about 25 percentile points, so 60%-80% of income differential between children of the affluent and children of the less affluent is eliminated after controlling for where those children go to college.

This suggests that meritocratic scholarship support can make big differences in income inequality, because students from less affluent families with comparable academic ability to students from more affluent families are much less likely to attend a selective college, or to attend college at all.

The data also suggests that college selectivity is a powerful predictor of lifetime income.

The data also reveal a strong regression to the mean. On average, students who grow up in families with above median incomes see a decline in the percentile of their own incomes relative to their parents. Meanwhile, students who grow up in families below median income see increases in the percentile of their own incomes relative to their parents. Students from families with close to the median income are most likely to have income percentiles close to that of their parents.

Poor students who attend top colleges do about as well as their rich classmates

Poor children at elite colleges ended up at about the 75th percentile.
Their rich classmates fared only a little better.
1102030405060708090100303540455055606570758085Ivy plusOther eliteSelective publicCOLLEGE TYPEAll childrenCHILD INCOME RANKPARENT INCOME RANK
Data here comes from the 1980-82 cohort, roughly the college classes of 2002-4. By this stage in life, income ranks are relatively stable.

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