Wealthier parents have been stepping up education spending so aggressively that they're widening the nation's wealth gap. When the Great Recession struck in late 2007 and squeezed most family budgets, the top 10 percent of earners—with incomes averaging $253,146—went in a different direction: They doubled down on their kids' futures.
Their average education spending per child jumped 35 percent to $5,210 a year during the recession compared with the two preceding years—and they sustained that faster pace through the recovery. For the remaining 90 percent of households, such spending averaged around a flat $1,000, according to research by Emory University sociologist Sabino Kornrich.
"People at the top just have so much income now that they're easily able to spend more on their kids," Kornrich said.
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The sums being spent by wealthier parents amount to a kind of calculated investment in their children. Research has linked the additional dollars to increased SAT scores, a greater likelihood of graduating from college and the prospect of future job security and high salaries.
The trend emerged gradually over the past three decades but accelerated during the worst economic slump since the 1930s. Now, enrollments at pricier private schools are climbing. Parents are bidding up home prices in top public school districts. Pay is surging for SAT tutors, who now average twice the median U.S. hourly wage of $24.45. The patterns suggest that the wealth gap could widen in coming years, analysts say.
"If you're at the bottom and the top keeps pulling away, you're just further behind," said Melissa Kearney, a senior economics fellow at the Brookings Institution.
Between 2007 and 2011, enrollment at private elementary and secondary schools whose annual tuition averaged $28,340 jumped 36 percent, according to federal data. The intensified reach for the costliest schools occurred even as enrollment in private schools overall fell.