Higher Education as a Driver of Economic Mobility

California has great wealth but also one of the highest poverty rates in the nation. The ability of Californians to move up the income ladder often depends on acquiring the education and skills needed for higher-paying jobs. But despite the state’s increasingly knowledge-based economy, too few Californians are earning a college degree.

This report examines the importance of higher education in promoting economic mobility. We find:

• A college degree confers multiple benefits. The value of a college degree is the highest it has been in decades. College graduates have better labor market success than less-educated adults, including substantially higher wages and lower unemployment rates: the typical full-time worker with a bachelor’s degree earned $80,000 in 2016, compared to $36,000 for those with only a high school diploma. College graduates are also less likely to need social services, more likely to own a home, and more likely to have jobs with good benefits.
• Not all Californians have the same chance to experience these benefits. Low-income, first-generation, Latino, and African American students-who make up most of the state’s public high school students-are less likely to graduate high school, enroll in college, and graduate college than their peers. For instance, among young adults born in California, 60 percent of Asian Americans and 40 percent of whites have at least a bachelor’s degree, compared to 21 percent of African Americans and 18 percent of Latinos.
• California must build upon its recent progress. The state and its educational institutions have invested heavily in a wide range of policies and programs that aim to help students make it into and through college. And California public universities have a relatively good track record with respect to economic mobility. But further action is needed in five critical areas: college preparation, financial aid, transfer to four-year universities, college access, and college graduation.

Every sector-from K-12 schools to public and private universities-has an important role to play in harnessing the power of higher education. Improving college access and completion so that more Californians, particularly historically underrepresented students, earn a college degree is necessary to fully realize the potential of higher education as an engine of economic mobility for all our children.