Are Universities Becoming More Unequal?

Yan Lau, Harvey S. Rosen

NBER Working Paper No. 21432
Issued in July 2015
NBER Program(s):   ED   PE

Observers have expressed concern about growing inequality in resources across universities. But are universities really becoming more unequal? We argue that the typical approach of examining endowment growth alone is not sensible. In line with the literature on household inequality, we focus instead on a comprehensive income measure. We find that although there is considerable inequality among institutions, concerns about the inexorable growth of inequality are overblown. Whether one looks at income, endowment wealth, or expenditure, inequality has been high but stable, exhibiting only negligible increases in recent years. Furthermore, there has been little mobility within the higher education sector.