A Tale of Fatter Pockets & Lesser Mobility


Public universities are primarily funded by a state government while private schools are run as an educational non-profit institution. Private universities do not receive funding from a state government but instead is primarily funded by donations and gifts.

A school’s endowment is essentially a fund that has been given to them through the government, donations, and gifts. This money is then invested and a small percentage (usually 4-5%) of  the returns on investment is what a university can now use to run their day-to-day operations.

Source: http://powershift.org/sites/wearepowershift.org/files/Understanding_University_Endowments.png

We hypothesized that a school’s endowment could be a strong indication of the quality of education the students received. However, we do realize that a school’s return on investment is not solely spent on prospective and current students, but also on other operational budgets that are necessary for a smooth running system.

It has been often stereotyped that private universities have an overall better quality education and as a group, we wanted to look at the role of endowments in this deception. Do public universities tend to have less money in their operating accounts than private universities? We chose universities which topped the ranks for highest endowment for both public and private schools and decided to compare their endowments

From the graph above, the blue bars represent public institutions while the green bars represent private institutions. As is obvious from the graph, private schools tend to have a larger endowment than most public schools, with the exception of a few schools such as University of Michigan and Texas A&M University that have a larger endowment than 50% of the ‘richest’ private institutions.

One would have made the assumption that private schools would have a larger endowment, because of prestige but we see that history also is a major contributor to sizable endowments. For example, although Emory may not be in the top ranking private schools, it still has a large endowment due to its historical connections with Robert Woodruff, past president of Coca-Cola. And also Harvard, an outlier on the graph, has a hefty endowment due to its prestige, as a top ranking school with generous alumni.

However, if we look at the income mobility of the students who attend these schools with hefty endowments, most are nowhere near the top of the list. The lapse in results poses an issue to us as a group, as we begin to question the allocation of this 4-5% return on investment to these schools. Do most schools see mobility rate as a marker of growth and excellence in their academia community? If so, would more of their operational budget be spent on improving curriculum and opportunities within the college that exposes students to better, higher paying jobs?





Equality of Opportunity

At the beginning of the project, our group was struggling to come up with a question that could be answered with the data we had. We were thinking of very broad questions that had many variables within it that made it difficult to answer. After tossing around ideas, we eventually agreed that we were interested in whether there was a gender difference in college tiers within each income level. Before making the graphs, we went on the site and looked at the data. There were two tables that contained data on gender, and one of them contained the information we needed. The hard part came next. I am not a data driven person and it was challenging to see which variables went where in making the graphs. After playing around with the variables and the different graphs, I eventually made 3 graphs. All three measured male vs. female, mean parental income, and college tier. The first was a double bar graph that contained both male and female on the same graph next to each other. The other two were the same; however, one was for females and one was for males. For the purpose of our question, I think that the first one that had measured male and female students side by side is more appropriate to the question that we are asking. From looking at the data, I had expected that there would be more females attending college overall as you went down the income brackets; however, this was not the case. In most instances, both genders were about equally present at the colleges. In the highest income bracket, there were more females attending selectively private colleges than males, which differed from a NY Times article I had read that stated that at the highest income level, there were more males attending colleges than females. After looking at the data and seeing the trends, I think that in the future it would be interesting to look at other factors, such as race, and see how this affects the data.