A college degree often translates into economic success: Americans who start at the bottom of the income ladder quadruple their chances of making it to the top when they earn a four-year degree, according to past research by the Pew Economic Mobility Project. Nevertheless, many young people from the bottom and middle of the ladder never enroll in some form of postsecondary education, or do not graduate if they do. The question is, why?
There are two primary explanations at the individual level: college costs and academic preparation. These two drivers are not mutually exclusive. Families who have less money to send their children to college also have fewer resources to invest in pre-college education. Many external factors outside of a family’s control also influence postsecondary decisions. For example, students consider the availability of jobs and financial aid when deciding whether to pursue higher education.
In a time of increased financial hardship, however, it is important to better understand how family wealth, independent of other factors, affects students’ decisions about higher education. The purpose of this study, Housing Wealth and Higher Education: Building a Foundation for Economic Mobility, was to develop an economic model that isolates the impact that family wealth has on college choices.