Is higher education reinforcing inequality?

In the UK and US the growth of social and economic inequality is taking place in societies in which formal participation in higher education is at an historic high. Is higher education then responsible for the pattern of unequal earnings?

If education produces human capital, which determines marginal productivity, and that determines wages – remember that this is the core of rates-of-return analysis – then the quantity and quality of higher education is responsible for growing income inequality.

But income inequality in the United States is now as high as in any country in modern history. Is it really the case that inequality of individual skills and productivities is greater in the United States today than in apartheid South Africa of the recent past? If that were the case, it would be bad indeed for US educational institutions. However, though US education can certainly be improved and made more open to the population, it is not as bad as this suggests.

The problem is that the theory of marginal productivity, human capital theory, is unable to explain striking variations in graduate incomes over time, as well as differences between earnings, and patterns of income distribution, in countries whose higher education is relatively similar.

Higher education as such seems to be largely decoupled from ‘the explosion of the topmost incomes’ since 1980, except that its elite institutions provide one of the principal pathways into high salaried professional positions, along with family and social networks, funnelling innovative talent into finance and managerial roles.

The historical perspective suggests that the role of higher education in inequality – and perhaps in social allocation in general – is more positional than economic. It also suggests that the social allocation function of higher education is not a constant, and is conditioned by the larger social, economic and political setting. This social allocation role of higher education is not only boxed in by larger inequalities, but can also become segmented within societies.

For example, recent work by William Deresiewicz and Roger Geiger suggests that in the US elite higher education plays a primary role in distinguishing the upper middle class – those nestling in the top 1% to 5% – from the more beleaguered American ‘middle middle’ class.

Above the level of the upper middle class, it is a different matter. Despite the meritocratic legitimation function of higher education, and prestige consumption of Ivy League and Oxford/Cambridge degrees, among the super-rich the role of the sector may be declining. As private fortunes grow, and especially as inheritance returns to a primary role, it becomes less essential to go to university.

For most rich children an Ivy League education is not essential. In fact in the United States 19% of the children of all high-income professional families, and 36% of those from other high-income families, do not attend college at all. If the powerful become more decoupled from higher education, this will further fragment consent to higher education as a common social project.

The limits of higher education

The paradox, of course, is that higher education remains potent in creating new prospects for individual students from low socio-economic backgrounds who lack family capital, even while it has a truncated impact on the overall distribution of opportunities.

Research by Brand and Xie, and also by Dale and Krueger, finds that students from social groups under-represented in higher education gain the largest benefits from it, relative to their compatriots who do not participate; and these students also benefit especially from education in elite institutions.

Conversely, students from socially advantaged backgrounds depend on higher education the least for access to social status, income and professional work, even while they participate at the highest rate.

What higher education cannot do on its own is expand the number of high value positions in society so as to enable expanded mobility into the middle and upper echelons of society. In the absence of absolute growth in the number of opportunities, competition into and within higher education can only become more intense, as middle class families jostle for position and bring every possible asset to bear on the competition to secure advantage.

Until the political economy changes. That’s the situation in the US and UK, and Australia and New Zealand – Canada sits closer to Western Europe, in relation to equality of opportunity.

However, what about the non English-speaking world? In a review of inequality of educational opportunity in 24 countries, Haim and Shavit remark that in most countries for which data are available, inequality declined in the first decades after World War II, and then tended to stabilise or increase. Nevertheless, in relation to both the economy and higher education, the longer-term patterns have diverged.

At the global level economic inequality is not increasing. The tendency to greater inequality in most large countries is counter-balanced by the lifting of the position of emerging Asia and Latin America, especially China, Korea, Indonesia, India and Brazil, relative to the English-speaking world and Europe. At the national level economic inequality is increasing in two thirds of countries, and diminishing in the other third.

Among those countries in which statistical inequality is rising, Nordic Norway, Denmark, Finland and Sweden have largely contained it. They maintain a high quality universal public approach to education, and a relatively equal income distribution and high social mobility, as does the Netherlands. France and Japan sit about halfway between the UK and the Netherlands, with Germany on the egalitarian side of France.

In the United States, students from tertiary educated families are 6.8 times as likely to access tertiary education than students whose parents did not attend. This is low social mobility. The UK ratios are similar. In Germany and Japan the ratio is 5.1. In the Netherlands it is 2.8; in the Scandinavian countries it lies between 1.4 in Finland and 3.0 in Denmark. In South Korea it is 1.1.

Elite and mass higher education

I have been critical of higher education’s role in social mobility, but it can also claim success. The level of participation has advanced remarkably, lifting common social and scientific literacy. One third of the world’s school leavers now participate in some form of tertiary education.

The female to male ratio of total years of education has lifted from 82% in 1990 to 91% in 2010. It is not yet parity in total, or in high value programmes, or positions of educational leadership, but gender gaps have partly closed.

The lesson of the last 50 years, however, is that higher education does not trigger egalitarian societies on its own, though it can facilitate them. We should set aside the old hubris that higher education is the principal maker of society, whether we think that we live in innovation societies or knowledge economies or somewhere else. In aggregate, what happens with incomes, wealth, labour markets, taxation, government spending, social programmes and urban development are overwhelmingly more important.

This suggests that researchers into higher education should take a closer interest in the larger intellectual and policy conversation on inequality, especially by focusing on the junctions between higher education and other social sectors.

In investigating relations between higher education and the labour market we need to move beyond primary reliance on rates-of-return and employability analysis. Both confer undue determining power on education. There is much to be gained by developing a more complex, nuanced and empowering picture of the passage from education to work.

We need to give more attention to transfer and other relations within hierarchical higher education systems and deepen the long-standing research concern with social access into elite institutions.

It is possible for elite higher education institutions to be relatively open in social terms. Take the University of California Berkeley: its intake is as academically strong as that of the Tier 1 private universities and its degrees are in excellent standing. Yet both UC Berkeley and the University of California, Los Angeles now each have as many low-income students and students from under-represented minorities as the whole Ivy League.

Under the progressive tuition policy, 40% of undergraduates at Berkeley are subsidised by other students and pay no tuition and two thirds of all students receive at least some financial aid. Half of all of Berkeley’s students graduate with no debt. The average graduate debt of US$19,000 is just over two-thirds of the national average of US$27,000.

Above all, we need to renew the focus on researching the conditions for building stronger mass higher education institutions. It is these institutions, rather than the research-intensive sub-sector, where quality is being emptied out by hyper-competition and austerity.

Yet these institutions, in higher education and further education, carry the main responsibility for social learning.

Educational research cannot identify the alchemy by which sub-elite credentials can turn to gold. What we can do is identify the social conditions and pedagogical barriers within which mass higher education institutions must work and improve on those conditions and barriers.

If, for the foreseeable future, we are doomed to educate a society dominated by a new aristocracy of money, in a political economy becoming more unequal each day, let us help to make this society more intelligent, more informed and more confident: a society in which human agency is more broadly distributed. The kind of society that can take its destiny into its own hands.

Simon Marginson is professor of international higher education at the UCL Institute of Education, University College London, UK. This is an edited version of a keynote speech he gave to the conference for the 50th Anniversary of the Society for Research into Higher Education, or SRHE, in June.


There is nothing wrong with an intellectual elite so long as we strive for equality to become this elite. If you are kept out due to being poor (for example), then that shouldn't be tolerated.

Christopher Haggarty-Weir on the University World News Facebook page