Income Inequality at Harvard

“As Justin Lanning ’12 noted in The Crimson last year, calculations based on information from the Harvard Financial Aid Office “come to the stunning conclusion that approximately 45.6 percent of Harvard undergraduates come from families with incomes above $200,000, placing them in the top 3.8 percent of American households.”  (the source).

As the new year starts at UCLA, I will be teaching first year students.  I don’t know what criteria these students met to be accepted.   What are the goals of the admissions office at leading universities?   Where did these “goals” come from?   What tradeoffs does the admissions office face?

Author: Matthew E. Kahn

Professor of Economics at UCLA.

25 thoughts on “Income Inequality at Harvard”

  1. I’d say that the admissions office of selective universities is caught between two conflicting goals:
    1. Revenue maximization; and
    2. Reputation maximization.

    Goal (1) is met by admitting wealthy students, business-oriented students, and jocks. It might also be weakly biased toward men, independently of handshakefulness and jocularity.
    Goal (2) is met by admitting students who do well on standard meritocratic measures, and some diversity students. (“Diversity” is not a code word for race: it also includes a student from a Montana ranch, a student in a wheelchair, an Estonian student, etc.) These days, standard meritocratic measures are definitely biased toward women.

    Unfortunately, some universities have discovered that, in this commercial society, reputation can be created by revenue. So I expect goal (1) to become increasingly predominant.

  2. I read a few years ago that the UC campuses admitted purely on the basis of numbers: SATs, GPA etc. That although essays and school recommendations were required they went unread. The size of the applicant pool compared to the size of the admissions staff drove this process. There were always a handful of special admits outside the usual process, but they represented a tiny portion of each entering class. Financial aid operated on the same basis: numbers from the FAFSA were crunched, fed through the algorithm and out popped an unalterable offer.

    Since the financial crunch, though, things may have changed in that out-of-state and out-of-country applicants may nowadays be considered on a different basis, simply because they’re a source of higher (and much needed) tuition revenue.

    1. Stanford University admits student on merit only, ability to pay is irrelevent. Anyone whose family makes less than $100,000 a year gets their tuition waived. I do not have recent data but some years ago at least our average parental income was below that of the public UC.

  3. Suppose this was reworded. Around half of the kids smart enough to be Harvard students are descended from parents smart enough to be professionals with incomes averaging over $100,000. Is this very surprising?

    1. Harold Myerson’s latest post will give anyone pause:

      Test scores, the data make clear, reflect social class and economic standing far more than anything else. If our educational reformers were serious about raising test scores, and student aptitude, and the competence of the American workforce, they might turn their attention to alleviating poverty and lifting living standards for our downwardly mobile working and middle class.

      1. Yes. This “rich kids at Harvard” thing is not really a reflection of the admissions decisions of the school, but a reflection of domestic policy in the U.S. Rich people go to better high schools. Why should we be surprised they’re more likely to be admitted to Americas most selective colleges. Many of America’s most selective private universities now have financial aid procedures such that people from families with annual incomes below $60,000 (or whatever) can attend essentially for free. It’s a nice gesture toward America’s working class, but the reality is that there are astoundingly few people from poor families admitted to such schools.

    2. Not surprising, but perhaps not well phrased. I would be very reluctant to accept the suggestion that the children of educated professionals are “smarter”, that they are inherently more intelligent – but as someone who falls within that class, and has seen others who do not, I am keenly aware of the advantages of growing up in a house full of books, with the peace and comfort to read them, a family in which education was prized and unusual opportunities (in many cases free opportunities) were sought out by parents seeking to maximize the education of their children and the breadth of their experience and exposure.

    3. That’s not really an accurate rewording.

      First, there are many more kids smart enough to be Harvard students than there are actual Harvard students, so there are questions of the choices Harvard makes.

      Second, it’s by no means clear that half of the “smart enough” population comes from families with incomes of $200,000+. In fact, since that represents only 3.8% of all families, I’d say it’s nowhere near half.

      Third, you have to define “smart enough” a little more precisely, and take into account its correlation with family income. Prep schools, tutors, SAT prep, various resume-building activities, all matter to some degree.

      Fourth, family income is not highly correlated with brains. Yes, neurosurgeons are smart, I guess, but even without taking inheritance into account there are a lot of people running around making $200K/yr who are less than top 4% smart.

      1. “Prep schools, tutors, SAT prep, various resume-building activities, all matter to some degree”
        There’s also simply family education, parenting and culture. Cognition, emotional regulation, delayed gratification are all incredibly important, and highly dependent on environmental stimulus for proper development. Many families don’t know how or are unable to develop this in their children because of economic and social realities. Often, it is simply a matter of finding time to be there for a kid, or only being able to afford a house or school in an environment where the ratio of other struggling, underdeveloped kids and parents is much higher than it would be in more equitable social circumstances.

        To the extent that Bostonian was hinting at genes, the notion is an offense to the overwhelming social research data that points to environment. It is an offense as well as to the millions of brilliant, underdeveloped and underpaid people out there who never enjoyed the kind of societal capital the rest of us might have, and finally to those of us in solidarity with them.

        1. And a lot of their efforts to seek out unusual talents they desire for their student body – things like Crew, or playing the Viola, or time spent playing anthropologist or field biologist – are going to segregate very strongly along class and family education lines.

        2. I am not familiar with what percentage of Harvard’s classes these days are Asian or not, and/so I don’t have an opinion about it.

          As an abstract issue though, I see nothing wrong with Harvard wanting to have ethnically balanced classes. As Ebbie noted above, Harvard has traditionally used a lot of different ways to get a mix of students. If you’re the 4H tomato queen of Nebraska and you have decent grades, they want you. I like that. It isn’t just about who plays violin and takes ballet (snore).

          Moreover, to me, the Harvard plan (I think that’s what this style of admissions is called?) isn’t even affirmative action. It’s just how anyone with a brain would run a school. (To me, “affirmative action” would be if you let in someone that you really wouldn’t normally think of letting in. Perhaps, with a 400 or 500 point SAT gap but who has something else important going for them. Maybe, then, it would count as a.a. I admit though that when you start stretching things, it gets into a big gray area.)

          I am sorry if people from groups that tend to have high scores take this personally, but it’s not like we had a vote where we all agreed that test scores and grades were the only things that mattered. (No such vote has been taken. Check the Cali electorate if you think the 209 vote was in ANY way representative. It wasn’t!) Diversity benefits the Asian students who are admitted to Harvard too. And anecdotally, I have Asian friends who also have said they wouldn’t want to go to an all-Asian school either.

          But having said all that, I am still sorry if people feel like other people don’t like them. I don’t think that’s true. There are important values on the other side too. I don’t think people should feel rejected. I didn’t get into my first choice school and now, I’m glad. The right school is not necessarily the one you think is right when you’re 17.

          1. NCG, to make it more concrete, those exact same measures that you are praising were initially designed specifically to reduce the number of Jews admitted to these universities after they had to abandon explicit quotas. I don’t know if you think that’s OK? I suppose the idea that it’s OK to discriminate against Jews is no more repulsive than the idea that it’s OK to discriminate against Asian-Americans, which I think you just endorsed, but both are quite repulsive. Surely you can see the difference between “a mix of students is good” and “we should effectively discriminate against certain already generally disadvantaged minorities to make sure we have more white/Christian kids on campus”?

            No one’s saying these schools should be all-Asian. Asian-Americans aren’t so monolithically superior to other students that they would drive them out completely! It feels weird that I even have to type that. (For instance, I’m not Asian and I got into Harvard in ’88 by being good at math. My roommate, who got in by being a lot better at math than me, wasn’t even Jewish.) And I don’t think that test scores and grades should be the only things that matter. But to give a boost to someone just because they’re from one of those big square states full of white people, because those big square states are full of white people, is B.S. To give a boost to someone because their daddy or mommy went to the same Ivy League school is B.S. squared. To give a boost to someone because they went to an elite prep school where the faculty all know the people in the admissions office is B.S. to the power of infinity. Maybe try giving a boost to poor deserving people?

    4. Yes, that would be surprising. While IQ is generally assumed to have high heritability, this is not what heritability means. You may be confusing heritability (the proportion of a trait’s variation caused by genetic factors) with heredity (the transmission of a trait from parent to child).

      While there is a correlation between the IQs of parents and their children, this correlation can actually be pretty weak if you only consider genetic factors (heredity).

      Very simply put, IQ is a function of thousands of individual genes and their interaction. Even if hypothetically IQ had a 100% heritability (i.e. that genes completely determined IQ), the chance that a child would inherit either parent’s gene configuration completely or mostly would be much smaller.

      (Now, once you account for the fact that growing up in a family with Harvard parents also skews the environmental factors considerably, it becomes much less surprising.)

  4. One way I’d look at it is that in attending a selective residential college, you are buying three things; an education, a credential, and a network.

    Networks are important–probably, in the long-term, relatively the most important of the three (the education might well be as good somewhere less selective). And a network is valuable as it connects you to people who control resources of some kind. So even if your entire and sole goal were to benefit students from low-income families, you might well find that having a majority of your students from wealthy families was what made that possible.

  5. I believe UC also allows applicants to count AP courses as a kind of extra credit, so that they can have GPAs that are supposedly above 4.0. And of course, availability of those courses is … you guessed it … correlated to income/home value/school district, etc etc. And let’s not even get to the resume padding that goes on.

    The entering class merely reflects the economic relations in this country. (And probably most others.)

    Prof. Kahn, as an economist, I’m curious to know, why do you care about this? Don’t you just think that the kids with the highest scores have the most “merit,” and therefore they are the most efficient students to have at an eminent public school? What do you teach your students about inequality?

  6. I don’t know about UCLA in particular, but when I was applying to UC campuses back in the day (~15 years ago), the major you were applying to could have some degree of impact on your acceptance. Bigger, more contentious programs could be tricky to get into. But I know for a fact that my family’s income had no bearing on the acceptance decisions at the campuses I applied to. Those points only came up on financial aid forms. Though in reading up at the UC Office of the President’s site, they say that the location of your secondary school and residence is considered ( There’s a certain degree of socio-economic sorting that happens with that of course.

  7. I don’t know about UCLA in particular, but when I was applying to UC campuses back in the day (~15 years ago), the major you were applying to could have some degree of impact on your acceptance. Bigger, more contentious programs could be tricky to get into. But I know for a fact that my family’s income had no bearing on the acceptance decisions at the campuses I applied to. Those points only came up on financial aid forms from what I recall.

    Now though, in reading up at the UC Office of the President’s site, they say that the location of your secondary school and residence is considered ( There’s a certain degree of socio-economic sorting that happens with that of course. And they consider your special circumstances which can include your family’s income. That site though is the broader, system wide criteria. I’m sure the particular campuses and programs have their own bit of extra constraints which could influence how any number of students were admitted. But those further criteria I would hope are academically based.

    Personally, I’m kind of surprised that faculty would be so unaware of their campus’ admittance requirements, especially if that faculty is teaching freshmen. Maybe I’ve got too much of a halo over college level faculty!

  8. Admissions data from the UC allows some sorting by income. The data is taken from FAFSA. At UCLA around 16% of students were from families earning 120k or more in 2009. Around 21% had unknown or unreported info, which is quite likely to come from wealthier students (since the group is probably chiefly composed of those who don’t apply for FAFSA, who are probably in the 120k+ group.)

    So, much better than Harvard. All in all, probably something like 50% of UCLA students are in the top 25% (~$80k+/year) of the income distribution of California families with children. That looks much better than the 50% or so of Harvard’s student body coming from the top 5%

      1. Hmmm…there’s seems to be a very strong positive correlation between net price and predicted graduation rate/actual graduation rate/rank.

      2. cc = 0.954
        NP = 6,533 + 567.9*AG + 34.72*GR + 0.2048*GR^2 – 567.7*PG

        cc = 0.932
        NP = 595.4*AG + 93.63*GR – 548.0*PG

        NP: Net Price
        PG: Predicted Graduation Rate
        AG: Actual Graduation Rate
        RG: Graduation Rank

  9. As a student who recently made the transition from UCLA to graduate school at Harvard’s Kennedy School (with a few years of work experience in-between), I’ve been particularly curious about the differences in admissions.

    When I was the student representative to the UCLA admissions faculty committee, I was pretty impressed with how little financial considerations played a role in admission decisions. In fact, the committee controversially twisted themselves up in knots trying to work around CA’s constitutional ban on affirmative action. Admissions based on income didn’t seem to be present, and if anything, the committee seemed to try to benefit lower socio-economic populations.

    The one place financial considerations were prominent was in the debate over increasing spots for out-of-state and international students. Budget cuts did lead to increasing the number of students who would be subjected to a 40k price tag.

    It is apparent that Harvard has a higher proportion of students from upper class families. I feel fortunate that I am insulated a bit at the Kennedy School. I’d be curious to see the numbers on income, but even if students generally come from wealthier families, the social norm is to talk about living in Africa for the peace corp and not mention one’s time at boarding school. When you go to a bar, it’s not difficult to tell who is from the business school and who is from Kennedy school. I feel like I made the right choice.

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