As I was revising my intro economics textbook, I came on an odd education fact. I don’t know quite how to interpret it, but it seems interesting. The chart below shows the share of consumer spending on education, by income class.
What’s interesting that the top 20% of households have dramatically increase the share of their spending that they devote to education, from 1.8% in 1999 to 3.1% in 2009. Meanwhile, the other income quintiles have seen a much smaller increase in education’s share. For example the third quintile–the “middle class” –has only increased education spending from 1.1% to 1.5% of their budgets.
There are of course all sorts of potential explanations. The top quintile are more likely to send their kids to expensive private colleges; the middle income quintiles are more likely to get financial aid; the middle income quintiles don’t have the resources to send their kids to college, and so forth. Take your pick.
But even if we don’t know the reason, we know the implication: Education spending is increasingly concentrated in the high-income backet. The top quintile accounted for 56% of all consumer spending on education in 2009. That makes education spending one of the most ‘top-heavy’ spending categories. Is this a sign that high-income households are the only ones who can afford to pay for college? Or is a sign that higher-income households are being soaked? Your choice.