Despite Education and Hard Work, Many Poor Stay Poor

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A new study suggests that attending school and keeping one’s nose to the grindstone may not be a foolproof plan for getting ahead.

The study, conducted by Richard Reeves and Isabel Sawhill, discovered that low-income students who graduate college actually remain in the bottom 20th income percentile (16%) almost as often as rich students who do not graduate college remain in the top 20th income percentile (14%).

“Bottom-income children without a diploma have a 54% probability of remaining on the bottom rung as adults,” Reeves and Sawhill write. “Rates of downward mobility from the middle three quintiles are also very high for those without a diploma (42%, 37%, and 48% respectively). Only those born in the top quintile appear to enjoy some immunity from the effects of not completing high school.”

Matt O’Brien of The Washington Post took it upon himself to analyze what is going on.  He writes that part of the issue is that rich parents are able to spend more on their children’s education right from the start.  Between 1972 and 2006, parents who have a higher-income increased their spending by 151% on “enrichment activities” for their children, compared to low-income parents, who increased spending on the same activities by 57%.

High-income parents were also found to talk to their children an average of 3 hours a week more than low-income parents, arming their children with a higher vocabulary, and in turn, better preparing them for Kindergarten and the following years.

Even low-income students who do everything they can to get ahead don’t always do better than high-income students who don’t try.

“Well, it’s all about glass floors and glass ceilings,” O’Brien notes. “Rich kids who can go work for the family business — and, in Canada at least, 70 percent of the sons of the top 1 percent do just that — or inherit the family estate don’t need a high school diploma to get ahead.”

Economists refer to this as “opportunity hoarding,” which includes such things as legacy college admissions and unpaid internships – any opportunity that allows high-income parents to help their children get ahead in life that low-income parents cannot afford to do.

Low-income students face other obstacles as well in their efforts to get ahead.  They are more likely to attend diploma mill schools that result in high amounts of debt but few job opportunities.  Some must go back to their poor neighborhoods after graduation, often places that do not offer well-paying jobs even with a good degree.

However, a report from US News and World Report suggests that low-income students are still better off attending college, as those who have a degree are paid more than overall those who do not.