A college education is increasingly a gateway to higher incomes, but in the
United States this effect is especially strong for a higher-level education from
a selective college. The gap in college completion between children from lowand
high-income families has increased significantly during the last two to three
decades of increasing income inequality. Bailey and Dynarski (2011) show that
the rate of college graduation increased by about four percentage points among
a cohort of young people born in the early 1980s to low-income parents compared
to their counterparts born in the early 1960s. However, among the cohorts
born to relatively high-income parents, the rate of college graduation increased
by almost 20 percentage points. Certainly the children of high-income families
will find it easier to afford college. Belley and Lochner (2007) examine the relationship
between family income and education outcomes in more detail to find
that, even when controlling for cognitive skills, the strength of the relationship
between family income and college attendance increased significantly over this
period, about doubling in its impact. This also holds for the quality of the college
attended. They suggest that the families of children coming of age during
an era of increasing inequality, those born in the 1980s, are more likely to be