Report on Higher Education Outcomes and Sustainable Development Goals

Introduction: Growing Disparities in Economic Returns

A recent analysis indicates a significant divergence in the economic benefits of higher education based on students’ socioeconomic backgrounds. This trend presents a substantial challenge to the achievement of several key Sustainable Development Goals (SDGs), particularly those focused on poverty, education, and inequality. While higher education provided comparable labor market value for all students prior to 1960, the wage premium for lower-income students has since been halved. This development undermines the role of education as a tool for upward mobility and equitable growth.

Analysis of Causal Factors and SDG Implications

The research identifies specific systemic shifts within the higher education landscape that have contributed to this growing inequality. These factors directly impact the progress towards a more sustainable and equitable future as outlined in the 2030 Agenda for Sustainable Development.

Factor 1: Institutional Stratification and SDG 4 (Quality Education)

A primary driver of the disparity is the increasing stratification of students into different types of institutions based on income. This trend contravenes the core principle of SDG 4, which calls for inclusive and equitable quality education for all.

• Low-Income Students: This cohort increasingly enrolls in teaching-oriented public universities, community colleges, and for-profit institutions. These institutions have experienced significant declines in funding, retention rates, and overall economic value since 1960.
• High-Income Students: This group has disproportionately enrolled in research-oriented universities, which have seen substantial improvements in quality metrics, including student-to-faculty ratios, per-student revenue, and graduation rates.

The report notes that before 1960, institutional choice accounted for less than 2 percentage points of the earnings gap between income groups. Today, it explains over 5 percentage points, highlighting a systemic failure to provide equitable educational quality.

Factor 2: Divergence in Fields of Study and SDG 8 (Decent Work and Economic Growth)

The choice of academic major has become another critical point of divergence, impacting graduates’ ability to secure decent work and contribute to economic growth, a central tenet of SDG 8.

• Between 2000 and 2014, higher-income students increasingly shifted from humanities to more lucrative fields like computer science.
• Conversely, lower-income students were often excluded from these high-return majors due to academic entry restrictions, redirecting them toward shrinking humanities disciplines with lower earning potential.

This sorting mechanism denies lower-income students access to skills for high-demand jobs, further entrenching economic disparities.

Conclusion: A Setback for SDG 10 (Reduced Inequalities)

The cumulative effect of these trends is a significant disruption of upward mobility for lower-income students, directly undermining SDG 10 (Reduced Inequalities) and SDG 1 (No Poverty). The research concludes that three primary factors account for 80% of the decline in wage premiums for this group:

1. The declining economic value of institutions historically attended by lower-income students.
2. The increasing enrollment of lower-income students in community colleges and for-profit institutions, which offer lower returns.
3. The divergence in academic majors, with lower-income students being channeled away from high-earning fields.

Ultimately, the findings reveal that institutional and major selection have become more significant contributors to long-term earnings inequality than access or tuition costs. This systemic issue within higher education poses a direct threat to the foundational goals of sustainable development by widening the gap between socioeconomic groups and limiting opportunities for decent work and poverty alleviation.

Identified Sustainable Development Goals (SDGs)

• SDG 4: Quality Education
• SDG 10: Reduced Inequalities
• SDG 1: No Poverty
• SDG 8: Decent Work and Economic Growth

Specific SDG Targets

1. SDG 4: Quality Education

   • Target 4.3: Ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university. The article highlights a significant disparity in access to *quality* tertiary education. It states that “lower-income college students are now less likely to enroll at research universities” and instead “increasingly attended community colleges and for-profit institutions,” which the article notes “tend to offer less value.” This points to a failure to ensure equal access to high-quality university education based on economic status.
   • Target 4.4: Substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship. The article discusses how “Higher-income students were also more likely to shift from humanities majors to more lucrative fields such as computer science,” while “academic entry restrictions” redirected “lower-income students into the shrinking humanities disciplines.” This indicates an inequality in acquiring skills that lead to high-return employment.

2. SDG 10: Reduced Inequalities

   • Target 10.2: Empower and promote the social, economic and political inclusion of all, irrespective of… economic or other status. The article’s central theme is the growing economic divergence between high- and low-income students post-college. The finding that the declining value of college for lower-income students has “significantly disrupted those students’ upward mobility” is a direct reflection of a failure in their economic inclusion.
   • Target 10.3: Ensure equal opportunity and reduce inequalities of outcome… The article directly addresses the inequality of outcome, stating that the “wage premium” for low-income students “has halved since 1960.” It identifies the causes as unequal opportunities in “institutional choice and major,” which have led to a situation where “Lower-income students now receive less than half the earnings boost from college as their higher-income peers.”

3. SDG 1: No Poverty

   • Target 1.2: Reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions. The article connects higher education directly to “upward mobility.” By showing that the economic benefits of college are diminishing for low-income students, it implies that a key pathway out of poverty is becoming less effective for the very group that needs it most, thus hindering progress on this target.

4. SDG 8: Decent Work and Economic Growth

   • Target 8.5: Achieve full and productive employment and decent work for all… and equal pay for work of equal value. The article’s focus on the “wage premium” and “long-term earning potential” relates directly to decent work. The disparity in earnings boost between high- and low-income graduates, despite both attending college, points to an inequality in the economic return on education, which is a facet of achieving “equal pay for work of equal value” in a broader sense.

Implied Indicators for Measuring Progress

1. Wage Premium by Income Group

   • The article explicitly mentions the “wage premium,” defining it as “the average wage difference between those who completed a year of college and those who didn’t.” It states this premium “has halved since 1960” for low-income students. This can be used as a direct indicator to measure the economic outcome of education for different socioeconomic groups.

2. Enrollment Patterns by Institution Type and Student Income Level

   • The article implies this indicator by stating that “lower-income college students are now less likely to enroll at research universities” and have “increasingly attended community colleges and for-profit institutions.” Tracking the percentage of low-income vs. high-income students at different types of institutions (research, teaching-oriented, community college) would measure progress towards equal access to quality education (Target 4.3).

3. Choice of Academic Major by Student Income Level

   • This is implied when the article notes that “Higher-income students were also more likely to shift from humanities majors to more lucrative fields such as computer science,” while lower-income students were redirected to humanities. Tracking enrollment in high-return vs. low-return fields, disaggregated by student income, serves as an indicator for Target 4.4.

4. Institutional Quality Metrics

   • The article suggests metrics for institutional quality when describing research universities, mentioning their “better student-to-faculty ratios, revenues and expenditures per student, and higher graduation rates.” These can be used as indicators to assess the quality of institutions predominantly attended by low-income students.

5. Contribution of Institutional Choice to Earnings Gap

   • The article quantifies this, stating that institutional choice, which accounted for “less than 2 percentage points of the income gap” before 1960, “explains more than 5 percentage points of the gap today.” This specific percentage can be used as a sophisticated indicator to measure inequality of outcome (Target 10.3).

SDGs, Targets, and Indicators Analysis

Source: highereddive.com