Wealthy Students, Wealthy Colleges

Many posts have discussed economic and educational inequality. 
 
The Meritocratic Consensus and Stratification in Higher Education Zachary Bleemer and Jesse Rothstein * August 2026

Abstract 

American colleges and universities are highly stratified by pre-college academic achievement, family background, and institutional resources. We study the meritocratic consensus in American higher education: colleges that high-testing students (who are generally also from high-income families) attend spend dramatically more on instruction than do those that enroll lower-testing students. Stratification by test scores has been largely stable since the 1960s, but the stratification of instructional resources has risen sharply since 1970 at both private and public institutions. Non-academic admissions criteria like athletics, legacy, and affirmative action are second-order in determining the allocation of students to universities. Potential economic justifications for the positive association of instructional expenditures with student prior achievement– q-complementarity between achievement and resources, convex social returns to high human capital, and incentives to invest in learning prior to college– have little empirical support. Resource stratification across universities has not increased in the past decade, largely due to increased public funding of universities that enroll lower-testing students through financial aid programs like California’s CalGrant, but stratification within institutions is now rising swiftly. JEL Codes: I23, I24, N32, Z13

 

Confidence in College

Many posts have discussed economic and educational inequality. 

 Daniel Cox at the Survey Center on American Life:

Most people believe there is a problem with higher education. In the last 10 years, confidence in college has collapsed among the public. Gallup found that only 38 percent of Americans report having a great deal or quite a lot of confidence in higher education, a nearly 20-point drop from 2015. Politics is an obvious culprit for the country’s diminished confidence. Republicans have experienced a more precipitous slide in support than Democrats, widening a modest partisan divide in views of higher education into a chasm. But there is another issue that looms even larger over higher education. Its cost. A Pew poll asked all Americans what they saw as the biggest problem in higher education and found the nearly universal issue was lack of affordability. Most Americans say that colleges are doing a lousy job of preparing students to find well-paying jobs. Fewer, but still a substantial number, say schools are failing to expose students to diverse perspectives. However, cost almost always tops the list of complaints. Even Americans who are the most dissatisfied with the direction of higher education—a group that is more right-leaning—are as likely to say it has to do with cost as politics.

This is a very predictable result of the massive increase in the cost of four years of college. Public and private universities have both seen dramatic price increases over the last few decades. The average cost of a college education in the early 70s hovered around $13k. Now, it is over $30k a year. The price tag at many small liberal arts schools, like Bates, can approach $100,000 per year. Students routinely graduate with loans that reach the six-figure territory and take years, or even decades, to pay off.\

The ideological battles being fought on many campuses are almost exclusively waged among elites. Debates over DEI initiatives, Gaza, antisemitism, and transgender rights dominate public attention rather than conversations about what can be done to make colleges work for the working class. The students who need the most. When public support for higher education wanes, the biggest losers are those who need them to work—not as bastions of progressive thought, but as drivers of economic opportunity, civic responsibility, and social solidarity. It’s no coincidence that some of the fiercest critics of higher education are found among those who have amassed considerable wealth and influence.

Boomers Cling to Wealth and Power

Many posts have discussed demographic trends, especially the decline of births and the aging of the population.

Bruce Mehlman:

The first of the Baby Boomer generation turns 80 this year, with the fourth and likely last of the Baby Boomer Presidents well-into his second term. Leadership will eventually pass to younger generations. But Boomers still hold much of the wealth and many of the offices, and they appear in no hurry to hand things over. A brief look at generational inheritance.

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Decades of rising earnings and asset values left Baby Boomers and older Americans holding nearly two-thirds of assets. And the wealth has outlasted the traditional handoff: Americans are living and working longer, while judges, Senators, House members and CEOs are markedly older than they were a generation ago.

Older generations are also sticking around longer in government & business… the average age of judges, Senators, House members & CEOs climbed for four decades and remains at or near record highs.

Inequality, Households, and Teen College Plans

Many posts have discussed economic and educational inequality. 

Inequalities feed on one another. Kids from noncollege families engage in fewer extracurriculars,which in turn hurts their chances at getting into good colleges and getting good jobs.

Daniel A. Cox reports on the 2026 American Teenagers Survey from the American Enterprise Institute’s Survey Center on American Life: 

Teens’ planned trajectory after graduation varies dramatically between not only boys and girls but also those with college-educated parents and those without. Nearly three-quarters (74 percent) of teen girls with college-educated parents report that they are planning on going to a four-year college after graduation. About half of teen boys with college-educated parents say they are planning on going to college themselves. Nearly as many teen girls (46 percent) raised in noncollege households plan on attending a four-year college or university. About half as many of their male peers (24 percent) report that they plan on going to college.

Inequality and Teen Social Media Use

Many posts have discussed economic and educational inequality. 

Daniel A. Cox reports on the 2026 American Teenagers Survey from the American Enterprise Institute’s Survey Center on American Life:

American teenagers spend hours online each day, with apps such as YouTube and TikTok dominating their attention. Thirty-five percent spend at least four hours a day on social media or playing video games. The amount of time teens spend engaged in these activities varies across households. The survey finds that teen girls raised by parents without college degrees are on more social media apps, spend more hours using them, and are less inclined to cut back than girls whose parents went to college, while among boys, the same divide emerges in the hours spent gaming.

The class divide in social media use may exacerbate existing inequalities instead of reducing them. Among teen girls, more active social media engagement is associated with negative personal outcomes, including less sleep, lower rates of reading, and lower feelings of personal satisfaction.

The majority of teenagers are spending multiple hours on social media every day. About four in 10 (39 percent) spend three or more hours of their day online. YouTube and TikTok are the most popular social media platforms teens visit. More than seven in 10 (72 percent) spend time on YouTube every week, while six in 10 say the same of TikTok. Gaming also eats up a significant portion of teens’ free time, although less so than social media. More than four in 10 (44 percent) teens spend at least an hour gaming every day.

Teen girls raised in less educated households are more likely to use Instagram (66 percent vs. 57 percent), Snapchat (49 percent vs. 44 percent), Facebook (31 percent vs. 15 percent), and X (12 percent vs. 6 percent). The education gap is largest in TikTok use. Nearly three-quarters (73 percent) of teen girls raised by parents without college degrees spend time on the app, compared with only about half (53 percent) of teen girls whose parents have college degrees. There is also a significant difference in the number of apps they use.[v] Forty-one percent of teen girls with non-college-educated parents report using at least four different social media apps, compared with 25 percent of teen girls raised by college-educated parents.

This same gap is also evident in the amount of time teen girls spend on social media. About one in five (21 percent) say they spend between one and two hours on social media every day. Thirty-nine percent of teens report they spend less than an hour a day or do not use social media at all. Teen girls whose parents did not go to college, however, log more hours on social media than any of their peers. Nearly half (49 percent) of teen girls raised by parents without a college degree report spending three or more hours a day using social media, compared with 36 percent of teen girls with college-educated parents.

Parental education is also correlated with teens’ efforts to reduce their screen time. Among girls, those raised in households with parents of higher education levels are more likely to report attempting to reduce their time spent online. Nearly six in 10 (58 percent) teen girls raised by college-educated parents say they have tried to reduce their social media activity in the past 12 months. In contrast, only 40 percent of teen girls who have non-college-educated parents report attempts to lessen their social media activity.

There is no evidence of the same divide among teen boys; they report similar social media usage patterns regardless of parental education. More evident education divides show up in boys’ gaming habits. Teen boys raised by parents without college degrees spend substantially more time gaming. Nearly three in 10 (28 percent) teen boys raised by parents without college degrees say they spend an average of four or more hours a day playing video games. Among teen boys with college-educated parents, only 19 percent play video games this often. Among teen girls, it’s only 7 percent.

Teens, Extracurriculars, and Inequality

Many posts have discussed economic and educational inequality. 

Inequalities feed on one another. Kids from noncollege families engage in fewer extracurriculars,which in turn hurts their chances at getting into good colleges and getting good jobs.

Daniel A. Cox reports on the 2026 American Teenagers Survey from the American Enterprise Institute’s Survey Center on American Life:

In addition to age, parental education levels shape how teens engage in extracurricular activities. Teens with college-educated parents tend to participate in a greater range of activities than those whose parents do not have a four-year college degree do. For instance, nearly one in four teens—including 29 percent of teen girls—with college-educated parents report participating in an academic club, compared with 13 percent of teens whose parents did not graduate from college. Teens with college-educated parents are also three times as likely to participate in student government or debate as those with less educated parents (12 percent vs. 4 percent).

With an expanding list of extracurriculars to participate in, teens live more scheduled lives now than ever before. Only 28 percent of teens say that they get at least eight hours of sleep every night. Forty-one percent say they get this much sleep a few times a week. Three in 10 teenagers report getting eight hours of sleep no more than once per week.

Income Inequality 1826-2026

Many posts have discussed economic and educational inequality. 

Bruce Mehlman:

Individual incomes have increased exponentially but not evenly. But while 2026 shows the highest market inequality of the five eras, overall inequality is lower than most… taxes and government transfers today redistribute far more than in earlier centuries.

 

American Dream 2026

Many posts have discussed American perceptions of the future. 

Stephen Raynes at Gallup:

As the United States approaches its 250th anniversary amid growing partisan divisions and widespread concerns about the country's direction, less than half (46%) of Americans believe everyone in the country has the opportunity to achieve the American Dream. While confidence in the state of the Dream has softened on most measures since 2024, belief that it is important to strive for (78%) has remained resilient. Despite this general decline since 2024, most U.S. adults still believe they will personally achieve the Dream (69%) and agree that the Dream is unfinished (58%).

These findings come from the second wave of the Milken Center for Advancing the American Dream (MCAAD)-Gallup American Dream Study, a nationally representative web and mail survey of more than 6,300 U.S. adults, conducted Jan. 7-March 4, 2026. The survey is part of an ongoing collaboration between Gallup and MCAAD to study how Americans connect to the concept of the American Dream. The research is featured in the center's long-term exhibition, the American Dream Experience, in Washington, D.C.

Neighbors and Inequality

Many posts have discussed social capital, volunteering and civic virtue.

Daniel A. Cox, Jae Grace, Avery Shields, "Strangers Next Door: The Decline of Neighborhood Socializing and the Class Divide in Belonging," AEI 5/5/26 

Key Points

• Since 2012, the percentage of young adults who talk to their neighbors at least a few times per week dropped from 51 percent to 25 percent. Among seniors, the decline was only seven points (63 percent to 56 percent).
• Compared with Americans without a degree, college-educated Americans are more likely to have worked with their neighbors to improve a condition in their community (46 percent vs. 34 percent), spent a social evening with a neighbor (58 percent vs. 46 percent), and exchanged texts or emails with a neighbor (65 percent vs. 45 percent).
• Forty-nine percent of Americans who attend religious services weekly talk to their neighbors regularly, compared with only 31 percent of Americans who never attend religious services.

Executive Summary

The 2025 American Neighbor Survey explores the various ways in which Americans are—and are not—interacting with the people in their immediate communities. In the past decade, the frequency of neighborly interactions has plummeted. This withdrawal has been particularly prevalent among young adults, while seniors have remained more consistently in touch with their neighbors. College-educated Americans also experience stronger neighborhood ties. Compared with Americans who have a high school degree or less, college graduates are more trusting of their neighbors, socialize with them more frequently, and are quicker to rely on them for help in times of need. The report also examines the association between attending religious services and the health of neighborhood ties, finding that more frequent attendees are more engaged neighbors.

Federal Spending By Age

Many posts have discussed Social Security and Medicare.

Penn Wharton Budget Model:

• In Fiscal Year 2025, federal outlays totaled over $7 trillion across 52 general spending categories. Within each of these categories, we trace spending at the line item and subcategory level to assign a total of $4.4 trillion in spending across three age groups: retirees; working-age adults; children and young adults. We classify the remaining $2.6 trillion as “all ages” because they finance broad public goods.
• Retirees (ages 65 and older) receive $2.7 trillion, or 62 percent of the $4.4 trillion in age-assignable federal outlays, driven mainly by Social Security and Medicare.
• Working-age adults (ages 26–64) receive $1.2 trillion, or 28 percent of age-assignable outlays, spread across Medicaid, Social Security disability benefits, veterans benefits, and Marketplace subsidies.
• Children and young adults (under age 26) receive $449 billion, or 10 percent of age-assignable outlays, concentrated in Medicaid, SNAP, child nutrition, and education programs.
• The heavy expenditure share on retirees is consistent with a voting model from the field of political economy. The retiree share is predicted to increase even more with an aging population and fiscal strain.

Federal Taxes Are Progressive

As many posts have pointed out, the federal tax system is more progressive than many people believe.  Higher-income people do pay higher rates and bear a larger share of the tax burden than people with lower incomes.

 Congressional Budget Office The Distribution ofHousehold Income, 2022 :

The average federal tax rate for households in the lowest four income quintiles increased in 2022, largely because of the expiration of two policies—the recovery rebate credits and expanded child tax credit—that reduced average tax rates in 2020 and 2021 for all quintiles (though households in the top quintile were generally less affected). Without those two policies, federal tax rates would have remained more stable from 2019 to 2022. Despite increasing in 2022, the average federal tax rate for each income group declined over the 1979–2022 period. The decline was largest for households in the lowest quintile and smallest for households in the highest quintile. 

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 The share of federal taxes paid by households in the top quin tile increased from 55 percent in 1979 to 70 percent in 2022. Most of that increase is attribut able to the change in the share of federal taxes paid by the top 1 percent of the income distribu tion, which grew by 13 percentage points—from 14 percent in 1979 to 27 percent in 2022

 

The Growing Upper Middle Class

Many posts have discussed economic and educational inequality. 

Stephen J. Rose and Scott Winship at AEI:

Abstract:

Populists on both the political left and right routinely claim that the middle class has been hollowed out. These claims, to the extent they are based on evidence, rely on a relative definition of the middle class, such that if income doubles for every family, the middle class does not grow. Using an absolute definition of the middle class, we find that the “core” middle class has shrunk, but only because more families have become upper-middle class over time. The upper-middle class boomed from 10 percent of families in 1979 to 31 percent in 2024, and its share of income doubled. The share of families whose income left them short of the core middle class fell from 54 percent to 35 percent. Claims of a hollowed-out middle class wrongly reinterpret widespread (if unequal) gains across the income distribution as rising insecurity and declining living standards.

From the article:

We create five income classes, depending on how families’ inflation- and size-adjusted incomes compare with the poverty guideline: poor or near poor (less than 150 percent of the poverty guideline), lower-middle class (150 percent to under 250 percent), core middle class (250 percent to under 500 percent), upper-middle class (500 percent to under 1,500 percent), and rich (1,500 percent or higher). These thresholds were selected building on past research by one of us (Rose 2010, 2016, 2021). We report results using different thresholds as a sensitivity check below.

Table B1 displays the unadjusted family income ranges corresponding to each income class for families of different sizes. For a family of three, the thresholds dividing the five classes are, roughly, $40,000, $67,000, $133,000, and $400,000 (in 2024 dollars).

 

Flat Fees and California Public Defenders

Many posts have discussed the American legal system.

Anat Rubin at CalMatters:

Nearly half of California counties pay private lawyers and firms to represent poor people in criminal cases, and most of them, like San Benito, do it through what’s known as a “flat-fee” contract, meaning they pay a fixed amount, regardless of how many cases the attorneys handle or how much time they spend on each case.

It’s a far cheaper alternative — at least in the short run — to operating a public defender office with government lawyers, and it’s created a second-tier justice system in rural stretches of the state: Seven of the eight counties with the state’s highest jail and prison incarceration rates have flat-fee contracts.

These arrangements so clearly disincentivize investigating and litigating cases that they’ve been banned in other parts of the country. But they have flourished in California, which provides no funding or oversight of county-level public defense.

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The nation’s first public defender office opened its doors in Los Angeles in 1913, the result of a decades-long advocacy effort led by Clara Shortridge Foltz, the first woman to be admitted to the bar in California. By the time the U.S. Supreme Court established a right to an attorney in state court criminal proceedings in 1963, more than a dozen California counties were operating their own public defender systems.

But as other states funneled money to government-run public defender offices, California left its system in the hands of the counties. Elected officials in many of those counties would eventually opt for the cheapest path — a flat-fee contract.

In 1984, only nine of California’s 58 counties relied on contractors for their primary public defense systems, according to a Bureau of Justice Statistics report published that year. Today, that number is 25.

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Much of the effort to ban flat-fee contracts has focused on the ways in which the model discourages investigations, one of the most critical components of criminal defense.

Defense investigators review police reports, visit crime scenes, chase down video surveillance footage and interview witnesses — work that most attorneys are not trained to do. They often find evidence that challenges the prosecution’s case and affects the outcome of a trial or the terms of a plea deal.

A recent CalMatters investigation found that poor people accused of crimes in California are routinely sent to prison without anyone investigating the charges against them, significantly increasing the likelihood of wrongful convictions.