* This essay summarizes results from chapters in the book Greg J. Duncan and Richard J. Murnane (eds.) Whither Opportunity? Rising Inequality, Schools and Children’s Life Chances, New York: Russell Sage: forthcoming, September, 2011.

America has always taken pride in being the land of opportunity, a country in which hard work and sacrifice result in a better life for one’s children.  For the first three-quarters of the twentieth century, economic growth, fueled in large part by the increasing educational attainments of successive generations of Americans, was a rising tide that lifted the boats of rich and poor alike.  In contrast, during the last three decades, the fruits of economic growth have not been widely shared.  Instead, the gap between the incomes of the nation’s rich and poor families has grown enormously. 

Little noticed, but vital for nation’s future prosperity, is that the gaps between the educational attainments of children raised in rich and poor families have also grown markedly during this period.  This pattern portends diminishing economic opportunities for low-income children in the next generation of Americans.  What has caused the growing gaps in family incomes and educational outcomes – and what we can do about it?

In 2009, the average inflation-adjusted income of families in the bottom 20 percent of the income distribution was only slightly higher than it was in 1977.  In  contrast, the incomes of families in the top 20 percent of the income distribution rose by more than one third and the average income of families in the top five percent of the distribution rose by 50 percent. 

Click here for graphs.

Now look at the academic achievement trends of children from rich and poor families.  Between 1978 and 2008, the gap between the average mathematics test scores of children from high- and low-income families grew by a third (from 97 points on an SAT-type scale to 131 points in 2008).  Given the importance of cognitive skills in determining educational success, it should come as no surprise that this growing test score gap has translated into a growing gap in completed schooling.  Indeed , the fraction of children raised in affluent families who completed college was 16 percentage points higher among children starting high school in the mid-1990s than among children in affluent families starting school in the mid-1970s.  In contrast, among children from low-income families, the graduation rate was only 4 percentage points higher for the later cohort than for the earlier one.

These growing gaps in educational attainment have translated into less educational mobility, particularly for men.  Until about 1970, fewer than one in ten young adult men and women had completed less schooling than their parents. By the 1990s, more than 20 percent of men and almost as large a fraction of women had less education than their parents.  Since education has been the dominant pathway to upward mobility in the United States, the growing gap in educational attainment between children from rich and poor families is likely to hinder the intergenerational economic mobility that has been a source of pride for Americans.

The growth in the gap between the incomes of affluent and working class American families stems primarily from economic and demographic forces.  The economic forces, which include computer-based technological changes, the globalization of trade, and the decline of labor unions, resulted in large declines in the earnings of American workers with no college credentials over the last three decades, during a period when the earnings of college graduates continued to increase.  Chief among the demographic forces is the increase in the number of children growing up in single-parent families, particularly among children of parents who did not continue their education beyond high school. 

Differences in family life contribute to the growing gaps in educational outcomes between children growing up in high-income and low-income families.  First, of course, is the growing gap in how much parents can spend on their children’s development.  In the early 1970s, the 20 percent of parents with the highest incomes spent approximately $2,700 more per year than bottom income quintile parents on goods and services aimed at enriching the experiences of their children .  In the mid-2000s, the corresponding inflation-adjusted difference in enrichment expenditures was $7,500.  Spending differences are largest for enrichment activities such as music lessons, travel, and summer camps.  Differential access to such activities may explain some of the gaps in background knowledge between children from high-income families and those from low-income families that are so predictive of reading skills in the middle and high school years.

Economic insecurity has also taken a toll on the mental health of low-income parents.  A recent study has shown that policy-driven increases in low-skill workers’ family incomes (in this case the Earned Income Tax Credit) improved maternal mental health and reduced biological markers of stress. Depression and other forms of psychological distress profoundly affect parents’ interactions with their children.

Historically, America has relied on its public schools to level the playing field for children born into different circumstances.  Residential segregation by income, which increased during the 1980s, has meant that children from low-income families are much more likely to have classmates with low achievement and behavior problems than are children from more affluent families . This has hindered schools’ ability to provide opportunities for upward mobility for all children.

Teacher quality is another major factor contributing to the weak academic performance of students in high-poverty schools.  Schools serving high concentrations of poor, non-white, and low-achieving students find it difficult to attract and retain skilled teachers. The net result is that the nation’s most economically disadvantaged children are much less likely than children from affluent families to be taught by skilled teachers.

What can be done? Improving the learning environments of poor children during the early years of life when developing brains are unusually sensitive to external stimuli is especially important.  Recent evidence about the effects of high-quality center-based child care and universal pre-K programs are promising.

Consistently high-quality schooling improves the life chances of children from low-income families.  Effective schools are characterized by an orderly and safe environment, an intense focus on improving instruction, frequent assessments of students’ skills and rapid interventions as needed, and substantial increases in instructional time.  Some whole school reform efforts and charter schools have been effective in improving the achievement of low-income children. 

In sum, as the incomes of affluent and poor American families have diverged over the past three decades, so too have the educational outcomes of the children in these families.  Test score differences between rich and poor children are much larger now than thirty years ago, as are differences in rates of college attendance and college graduation. Only if our country finds a way to understand and reverse these trends will it be able to maintain its rich heritage of upward social mobility through educational opportunity.