Why Are Parents So Scared About College?
The economics behind the college admissions scandal.
Posted Mar 15, 2019
The college admissions scandal this week brought some startling revelations: Hollywood celebrities, CEOs, and other members of the moneyed elite are alleged to have paved their kids’ way into college by criminal means, such as outright cheating on the SAT and ACT college admission tests and bribing athletic coaches to get fellowships for sports the kids never played.
While these actions are extreme and deplorable, they fit into a broader trend. First of all, there are legal ways of easing access to top colleges. The admission of Jared Kushner to Harvard University shortly after his father pledged a $2.5 million donation was not a coincidence.
But the trend towards pushing children ahead by all available means goes far beyond the realm of the Ivy League. In recent decades, parents of all backgrounds have intensified their efforts in giving their children an edge.
Since the 1970s, the time that average American parents devote to interacting with their children has doubled; the largest increase was for activities that are linked to success in education, such as reading to children and helping them with homework. Parents now also spend a lot more money on items that can help with getting admitted to top colleges, ranging from private school and extracurricular activities to tutoring for college admission tests and writing application essays.
We argue in our book “Love, Money, and Parenting” that these trends are driven by rising economic inequality, which includes specifically a rising pay gap between workers who went to college and those who didn’t. In the 1970s, college graduates made only about 50 percent more, on average, than Americans lacking a college degree. By 2010, they made about twice as much.
From the perspective of parents, the stakes in their kids’ educational achievement have risen enormously – in a world were only college can provide a safe path to an economically secure and happy existence, parents have every reason to be concerned and to redouble their effort to help their children succeed.
What is perhaps more surprising is that the rise in the intensity of parenting has been the strongest among richer and well-educated parents. Kids from these advantaged families have a high likelihood of graduating from college, to begin with – shouldn’t this allow parents to stay a bit more relaxed?
There are two reasons why, in fact, many well-off parents are particularly enthusiastic participants in the modern parenting race. One is straightforward: intensive parenting costs money, and in times of high inequality, the rich have a lot more of that than the poor.
Money helps not just with paying for private school, extracurriculars, and SAT tutoring, but can also free up time to spend with children. Parents who do need to take on two jobs to make ends meet and who can pay others to do the laundry and mow the lawn have more time to do work on flash cards with the little ones.
An even bigger reason is that inequality does not stop with the pay gap between college graduates and others. Inequality has risen not just between the rich and the poor, but also among well-off households. Within the proverbial top one percent of households in the income distribution, the share going to the top 0.1 percent has gone up by a lot. Even well off parents worry about the prospect that their children may not be able to maintain the living standard and position in society that they grew accustomed to. And in today’s economy, the slope of potential social decline is steep at the top.
No surprise, then, that many parents think that just any college degree won’t do for their kids. As overall college enrollment has risen, college graduates now fill many entry-level positions that used to be done by high school graduates, for not much more pay.
At the other end of the spectrum, average graduates of Ivy League colleges make about twice as much as others ten years into their careers. The top 10 percent of Ivy Leaguers make more than $200,000 per year by then, compared to less than $70,000 for the top earners from other schools.
Even advanced degrees don’t confer the security they used to. Law school graduates have recently found out that demand for lawyers has not kept up with supply, and that taking on a lot of student debt for a degree from a less prestigious program may turn out to be a disastrous financial investment. Meanwhile, graduates from the top schools can still count on six-figure starting salaries and a secure, prosperous career.
For proper perspective, parents should keep in mind that the salary gap between graduates of different schools does not directly measure the benefit from attending a highly selective university. Top schools attract many students with top grades and test scores who are likely to be successful no matter where they go to college. Some of the salary premium for graduates of top colleges simply reflects the underlying talents of the students, rather than the value added of the schools.
Still, most studies find at least some benefits of attending higher ranked-programs for a given student, and in times of high stakes, it is understandable that parents seek out the best options available to their kids.
For one-percenters who want to cement the position of their family as part of the American elite, an additional motivation is that at the very top of society, graduates from top schools continue to be strongly overrepresented.
Every judge currently on the Supreme Court attended law school at either Harvard or Yale. A recent study examined the educational background of the elites in various countries, where elite membership is measured by being listed among the world’s most powerful people by Forbes Magazine, attending the World Economic Forum in Davos, or being a billionaire. The study found that more than 85% of the most powerful men in America went to an elite college. This is a distinctly American phenomenon - in most other countries, the elite has a wide range of educational backgrounds.
The general trend towards more intensive parenting reflects parents’ perception that in an increasingly unequal economy, the path to success for their children has narrowed. Families who wish for their child to be the first in their family to go to college have little in common with those who would like to maintain their position in the top one percent - but neither can escape the broad economic trend towards higher inequality.
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