The College Wealth Divide Continues to Grow

Since the 1980s, wage differences between individuals with a college degree and individuals without a college degree have increased in a remarkable manner (see, e.g., Levy and Murnane, 1992; Katz and Autor, 1999; and Goldin and Katz, 2007). Among the explanations for this trend are skill-biased technical change, socio-demographic factors, and institutional features (Card and Lemieux, 2001, and Fortin, 2006). Recently, attention has shifted toward other trends for households whose head holds a college degree (college households) and households whose head does not hold a college degree (noncollege households), in particular the relationship between college education and wealth inequality (Emmons, Kent, and Ricketts, 2018, and Pfeffer, 2018).

In our article "The College Wealth Divide: Education and Inequality in America, 1956-2016" (Bartscher, Kuhn, and Schularick, 2020), we focus on wealth differences between college and noncollege households—the college wealth premium. Using newly available microdata representative of the U.S. population, we document that the college wealth premium has increased threefold since the 1970s. We build on the work of Kuhn, Schularick, and Steins (forthcoming), who have combined and harmonized data from the post-1983 Survey of Consumer Finances (SCF) with its predecessor surveys dating back to the postwar era. The combined "SCF+" data close a gap in the availability of high-quality microdata over a long horizon.