The US wealth gap is fueling a gap in education and upward mobility. In addition to income, wealth can buy educational achievement through more books, tutors, and private schools. But wealth also offers security that income and financial aid cannot. Young people in high-wealth families can focus on the academic challenges of higher education instead of the financial ones.
Even after accounting for family income, demographics, and other factors, we find significant differences between young people based on their families’ wealth:
Young people from high-wealth families (wealth above $223,500) are more than one and a half times more likely to complete at least two years of college than those from low-wealth families (wealth below $2,000).
Among families in which parents did not graduate from college, young people from high-wealth families are roughly twice as likely to be upwardly mobile than those from low-wealth families.
Because education is a key way to escape poverty and gain economic independence, increasing access to wealth can mean increasing access to opportunity—particularly for black and Hispanic families, who have less wealth than white families. Policymakers should consider family wealth, not just income, in developing policies and programs to improve economic mobility.
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