The Dynamics of Opportunity in America Irwin Kirsch & Henry Braun, Editors Evidence and Perspectives The Dynamics of Opportunity in America Irwin Kirsch • Henry Braun Editors The Dynamics of Opportunity in America Evidence and Perspectives ISBN 978-3-319-25989-5 ISBN 978-3-319-25991-8 (eBook) DOI 10.1007/978-3-319-25991-8 Library of Congress Control Number: 2015955136 Springer Cham Heidelberg New York Dordrecht London ' Educational Testing Service 2016 Open Access This book is distributed under the terms of the Creative Commons Attribution- Noncommercial 2.5 License (http://creativecommons.org/licenses/by-nc/2.5/) which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited. 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Printed on acid-free paper Springer International Publishing AG Switzerland is part of Springer Science+Business Media (www.springer.com) Editors Irwin Kirsch Educational Testing Service Princeton , New Jersey, USA Henry Braun Lynch School of Education Boston College Chestnut Hill , Massachusetts , USA This book is dedicated to our colleague and friend Andy Sum. Andy worked closely with us on the America’s Perfect Storm report and helped to inspire this initiative with his commitment to understanding the factors infl uencing opportunity in America and his passion for sharing what was learned to inform the public discourse. vii Pref ace Opportunity has long played a central role in the American experience. Although the playing field has never been entirely level, most Americans still believe that with hard work, some intelligence, and a little luck, it is possible to make a better life for oneself and one’s family. That is, the American Dream is alive and well. This was certainly the case in the decades following World War II, when the American econ- omy grew strongly and, to a reasonable extent, prosperity was shared among all income groups. However, after 1980 things began to change. For one thing, the productivity gains recorded by the economy since then have not been shared equally, resulting in greater inequality in both income and wealth. For another, economic restructuring, due in part to the forces of technology and globalization, has increased the premium to high skills, while those with weaker skills have lost ground in real terms. In addition, policy choices at various levels of government, as well as chang- ing business practices, have generally contributed to the growing divergence in eco- nomic outcomes. One question many are asking is: Does this really matter? In fact, recent data tells us it matters a great deal. There is strong evidence that a family’s circumstances are increasingly predictive of the human and social capital that will be accumulated by its children and, consequently, their own prospects as adults. Today, a large propor- tion of a new birth cohort will grow up in circumstances that will give them a small, if not negligible, chance of following a trajectory that will lead them to a markedly better place than where they started. In other words, the playing field has tilted sharply, making it more difficult for many to have a decent chance of realizing the American Dream. The devastation wrought by the Great Recession of 2007–2009, along with the slow recovery that followed, has only added to the pessimism of the general public regarding the future. It is in this context that, in 2013, Kurt Landgraf, then President and CEO of Educational Testing Service (ETS), decided, with the full support of the ETS Board of Trustees, to fund an initiative now titled Opportunity in America , which builds on viii a report issued by ETS in 2007 titled America’s Perfect Storm 1 That report exam- ined the likely impact of three powerful forces on the prospects for the future. Those forces were (i) wide gaps in literacy and numeracy among both school-age and adult populations, (ii) seismic changes in economic activity and the restructuring of labor markets, and (iii) demographic trends leading to a population that, over a genera- tion, would be somewhat older and much more diverse. The authors argued that, left unchecked, the convergence of these forces would drive the country on a path lead- ing to lower average cognitive skills and greater polarization, economic and other- wise, with grave implications not only for millions of individual lives, but also for society as a whole. Under the direction of a national advisory panel, this initiative looks more deeply into the dynamics of how human and social capital are developed, along with their growing influence not only on adult outcomes but also on the transmission of oppor- tunity to the next generation. An overarching goal of the initiative is to contribute to public understanding of how these dynamics drive inequality of opportunity where, by opportunity, we mean pathways to the accumulation of human and social capital. This volume is one of several products planned for the Opportunity in America initiative. It contains 14 chapters, including an epilogue, written by leaders across a range of fields including education, economics, demography, and political science. They bring a variety of historical, theoretical, and research perspectives to the dis- cussion of inequality of opportunity. As a set, these chapters not only illuminate key aspects of the problem but also offer suggestions of what policies, programs, and/or changes in practices could begin to reverse the trends we are seeing. Written in an engaging style, this volume constitutes an essential foundation for informed discus- sion and strategic analysis. * * * We extend our deep appreciation to those who contributed to the ETS initiative now known as Opportunity in America. We especially wish to thank the authors who contributed to the development of this volume and to acknowledge the guid- ance provided by the members of our National Advisory Panel, whose names appear in the appendix. We enjoyed the opportunity to collaborate with all of them. In addi- tion to Kurt Landgraf, who, with the full backing of the Board of Trustees, provided the funding and support necessary to conduct this phase of the work, we also wish to thank Walt MacDonald, the current president and CEO of ETS, and Ida Lawrence, Senior Vice President for Research and Development, for their continued interest and support of the initiative. Special thanks also go to our colleagues at ETS for their excellent work on vari- ous aspects of the project including contacting and supporting the national advisory panel members and the authors, arranging their travel and contracts, as well as for their planning and supporting the meetings and seminars that were held in Washington, DC, and at Educational Testing Service in Princeton, NJ. These 1 Irwin Kirsch, Kentaro Yamamoto, Henry Braun, and Andrew Sum, America’s Perfect Storm (Princeton, NJ: Educational Testing Service, 2007). Preface ix individuals include Marylou Lennon, Judy Mendez, Anita Sands, and Judy Shahbazian. We also wish to extend our gratitude to Larry Hanover for his careful handling of the review and editing process for each author and to Clara Sue Beym for her watercolor that graces the cover of this volume. Princeton , NJ , USA Irwin Kirsch Chestnut Hill , MA , USA Henry Braun Preface xi In December 2015, just before this book went to press, the Every Student Succeeds Act, the successor to No Child Left Behind, was passed by Congress and signed by the President. Although it continues some of the testing requirements and disaggre- gated reporting of NCLB, it severely curtails federal oversight of state accountabil- ity systems. We offer this note to provide context when reading certain chapters, written several months earlier, that address NCLB and related issues. For a detailed summary, see http://edworkforce.house.gov/uploadedfiles/joint_esea_conference_ framework_short_summary.pdf. Editors’ Note xiii Contents 1 Introduction: Opportunity in America—Setting the Stage ................. 1 Henry Braun and Irwin Kirsch Part I Understanding Where We Are Today 2 Segregation, Race, and the Social Worlds of Rich and Poor .............. 13 Douglas S. Massey and Jonathan Tannen 3 Federalism and Inequality in Education: What Can History Tell Us? .................................................................... 35 Carl Kaestle 4 The Changing Distribution of Educational Opportunities: 1993–2012 ...................................................................... 97 Bruce Baker, Danielle Farrie, and David G. Sciarra 5 The Dynamics of Opportunity in America: A Working Framework ........................................................................... 137 Henry Braun Part II The Labor Market 6 Wages in the United States: Trends, Explanations, and Solutions ........................................................................................... 167 Jared Bernstein 7 The Widening Socioeconomic Divergence in the U.S. Labor Market ....................................................................... 197 Ishwar Khatiwada and Andrew M. Sum xiv Part III Education and Opportunity 8 Gates, Gaps, and Intergenerational Mobility: The Importance of an Even Start .......................................................... 255 Timothy M. (Tim) Smeeding 9 Quality and Equality in American Education: Systemic Problems, Systemic Solutions ................................................ 297 Jennifer A. O’Day and Marshall S. Smith 10 Restoring Opportunity by Expanding Apprenticeship ........................ 359 Robert I. Lerman 11 Improving Opportunity Through Better Human Capital Investments for the Labor Market ........................................... 387 Harry J. Holzer Part IV Politics and the Road Ahead 12 Political and Policy Responses to Problems of Inequality and Opportunity: Past, Present, and Future ........................................ 415 Leslie McCall 13 How Will We Know? The Case for Opportunity Indicators ............... 443 Richard V. Reeves Part V Seeking Inclusive Prosperity 14 Epilogue: Can Capitalists Reform Themselves? .................................. 467 Chrystia Freeland Appendix: Members of the Opportunity in America Advisory Panel ....................................... ...................................... 475 Index ....................................... .......................................................................... 477 Contents xv Editors Irwin Kirsch is Tyler Chair in Large-Scale Assessment and Director of the Center for Global Assessment at Educational Testing Service (ETS). He also serves as Project Director of ETS’s Opportunity in America initiative. Henry Braun is Boisi Professor of Education and Public Policy in the Lynch School of Education and Director of the Center for the Study of Testing, Evaluation, and Education Policy at Boston College. He also serves as Project Co-Director of ETS’s Opportunity in America initiative. Contributors Bruce Baker is Professor at the Graduate School of Education at Rutgers University and maintains blogs on school finance and educational policy. Jared Bernstein is a Senior Fellow at the Center on Budget and Policy Priorities. He previously served as Chief Economist and Economic Adviser to Vice President Joe Biden. Danielle Farrie is Research Director of the Education Law Center in Newark, New Jersey. Chrystia Freeland is the Canadian Minister of International Trade and Member of Parliament for University-Rosedale, Toronto, author of Plutocrats: The Rise of the New Global Super-rich and the Fall of Everyone Else , and journalist. About the Editors and Contributors xvi Harry J. Holzer is Professor at the McCourt School of Public Policy at Georgetown University and is an Institute Fellow at the American Institutes for Research. He previously served as Chief Economist at the U.S. Department of Labor. Carl Kaestle is University Professor of Education, History, and Public Policy emeritus at Brown University. Ishwar Khatiwada is a Labor Economist at the Center for Labor Markets and Policy at Drexel University. Robert I. Lerman is an Institute Fellow at the Urban Institute, Emeritus Professor of Economics at American University, and a Research Fellow at IZA in Bonn, Germany. He is also the Founder of the American Institute for Innovative Apprenticeship. Douglas S. Massey is the Henry G. Bryant Professor of Sociology and Public Affairs at Princeton University’s Woodrow Wilson School of Public and International Affairs. Leslie McCall is a Professor in the Department of Sociology and Faculty Fellow at the Institute for Policy Research at Northwestern University. Jennifer A. O’Day is an Institute Fellow of the American Institutes for Research and is the Founder and Chair of the California Collaborative on District Reform. Richard V. Reeves is a Senior Fellow in Economic Studies, Co-Director of the Center on Children and Families, and Editor-in-Chief of the Social Mobility Memos blog at the Brookings Institution. David G. Sciarra is Executive Director of the Education Law Center in Newark, New Jersey. Timothy M. (Tim) Smeeding is the Arts and Sciences Distinguished Professor of Public Affairs and Economics at the University of Wisconsin-Madison. He was pre- viously Director of the Institute for Research on Poverty at Wisconsin-Madison. Marshall S. Smith is a Senior Scholar at the Carnegie Foundation for the Advancement of Teaching, a former Dean and Professor at Stanford, and a former Under Secretary and Acting Deputy Secretary at the U.S. Department of Education in the Clinton administration. He is a Fellow of the American Academy of Arts and Sciences and the National Academy of Education. About the Editors and Contributors xvii Andrew M. Sum is Professor Emeritus of Economics at Northeastern University in Boston. He was previously the Director of the Center for Labor Market Studies. Jonathan Tannen is a Doctoral Candidate in the Urban and Population clusters of the Woodrow Wilson School and the Office of Population Research at Princeton University. About the Editors and Contributors xix List of Figures Fig. 2.1 Black-White residential dissimilarity and Black and White poverty rates in metropolitan areas.............................. 15 Fig. 2.2 Segregation trends in the most and least segregated metropolitan areas......................................................................... 17 Fig. 2.3 Percentage of households earning less than $30,000 in neighborhoods of metropolitan areas (by various race/income groups)...................................................................... 19 Fig. 2.4 Percentage of households earning more than $120,000 in neighborhoods of metropolitan areas (by various race/income groups)...................................................................... 21 Fig. 2.5 Percentage of individuals 25 and over with a college degree in neighborhoods of metropolitan areas (by various race/income groups)................................................... 22 Fig. 2.6 Potential home wealth in neighborhoods of metropolitan areas (by various race/income groups).......................................... 23 Fig. 2.7 Relationship between racial segregation by neighborhood to racial segregation by school district across states..................... 24 Fig. 2.8 Relationship between racial segregation and gap in percentage affluent between poor Black and affluent White neighborhoods .................................................................... 25 Fig. 2.9 Relationship between racial segregation and gap in potential home wealth between poor Black and affluent White neighborhoods ................................................ 26 Fig. 2.10 Percentage of households earning less than $30,000 in neighborhoods of hypersegregated metropolitan areas (by various race/income groups)................................................... 27 Fig. 2.11 Percentage of households earning more than $120,000 in neighborhoods of hypersegregated metropolitan areas (by various race/income groups)................................................... 28