College and University Wealth: Unequal and Stable

August 10, 2015

The wealth gap in American higher education is a topic of much concern, typically receiving attention when colleges and universities release their annual endowment reports, suggesting that the rich get richer. But a new study suggests that while the wealthy may be far wealthier than the average institutions, the gap isn't growing by much. The National Bureau of Economic Research released a study this morning (abstract available here) arguing that endowments alone are not the right measure to determine wealth inequality in higher education. When wealth is studied by also including measures of income and spending, there have been only "negligible increases" in recent years in institutional wealth gaps, the study finds. At the same time, it affirms that the wealth gaps -- though more stable than conventional wisdom has held -- are large and real. The authors of the study are two economists, Yan Lau of Reed College and Harvey S. Rosen of Princeton University.

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