Around that time, the rates of college graduation began to decrease and overall high school graduation numbers leveled off. For Goldin and Katz, expanding access to higher education could actually help reduce inequality.

You could wipe out a large fraction of inequality by ramping up the education of individuals who are limited in their ability to access and finish a college education, said Goldin.

The problem of wealth inequality is more extreme than income inequality since the former builds on the latter, said Katz, and their effects persists across generations. The legacies of the Jim Crow era and racism against Blacks are expressed today in residential segregation, housing discrimination, and discrimination in the labor market.

For Katz, who has been studying housing discrimination and its effects on upward mobility, public policies can be implemented to reduce residential segregation. A study Katz co-authored with Chetty and Nathaniel Hendren, professor of economics, found that when low-income families move to lower-poverty neighborhoods, with help of housing vouchers and assistance, it is likely to reduce the persistence of poverty across generations. Chetty and Hendren, along with John Friedman of Brown University, were the co-founding directors of the Equality of Opportunity Project, now expanded and called Opportunity Insights, based at Harvard.

Growing inequality is spoiling the chances to have a better life than the previous generation. Recent numbers show that the top 1 percent has seen their wages grow by 157 percent over the last four decades, while the wages of the bottom 90 percent grew by only 24 percent.

The American dream has sort of shifted from one in which the economic growth of the nation was shared more across the income distribution, said Goldin. Now its essentially a lottery. It is as if we all go on, buy a ticket to the lotto game, and a couple of people from the millions are going to win it. And the rest of the people are not going to share in that.

To keep the American dream alive and return to the era of shared prosperity, the government must act, said Katz. Both Goldin and Katz believe that an expansion of investment in higher education infrastructure and access to a high-quality college education would have a powerful impact in the lives of many Americans. It could be similar to the effects of the high school movement, which lifted millions of American families out of poverty during the first half of the 20th century.

In the early 20th century, we allowed everyone access to high school, said Katz. We have never done that for college, even though college is as essential today as high school was 100 years ago.

The economic returns of a college degree are important, but the social returns are also valuable, said Anthony Jack, assistant professor of education at the Graduate School of Education.

Workers who are more educated tend to be in jobs that are more recession- and pandemic- proof, said Jack, who also holds the Shutzer Assistant Professorships at the Radcliffe Institute. They also tend to live longer, have better health outcomes, and be more civically engaged. Education means more than just extra dollars in the bank. Its also the constellation of things that come along with it.

But the road to college has become increasingly harder, especially for low-income people, even though access to college for disadvantaged students has increased over the past two decades. A report by the Pew Research Center found that the number of enrolled undergraduates from lower-income backgrounds grew from 12 percent in 1996 to 20 percent in 2016. Most of that growth has taken place in public two-year colleges and less-selective institutions.

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Racial wealth gap may be a key to other inequities - Harvard Gazette