Georgetown study: 'To succeed in America, it's better to be born rich than smart'

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Children in the U.S. are told from an early age that hard work pays off, starting with their time at school. 

But according to a recent report from the Georgetown Center on Education and the Workforce (CEW), "Born to Win, Schooled to Lose," being born wealthy is a better indicator of adult success in the U.S. than academic performance.

"To succeed in America, it's better to be born rich than smart," Anthony P. Carnevale, director of the CEW and lead author of the report, tells CNBC Make It. "People with talent often don't succeed. What we found in this study is that people with talent that come from disadvantaged households don't do as well as people with very little talent from advantaged households."

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Carnevale and his team analyzed data from the National Center for Education Statistics (NCES) to trace the outcomes of students from kindergarten through adulthood, assessing intellect according to performance on standardized math tests. The researchers then categorized students by socioeconomic status, considering household income, parents' educational attainment and parents' occupational prestige (a measure of social standing, power and earnings ability as defined by the Duncan Socioeconomic Index).

What they found was that poor kindergartners with good scores are less likely to graduate from high school, graduate from college or earn a high wage than their affluent peers with bad grades.

Specifically, the study found that a kindergarten student from the bottom 25% of socioeconomic status with test scores from the top 25% of students has a 31% chance of earning a college education and working a job that pays at least $35,000 by the time they are 25, and at least $45,000 by the time they are 35.

A kindergarten student from the top 25% of socioeconomic status with test scores from the bottom 25% of students had a 71% chance of achieving the same milestones.

Even if students from disadvantaged households do beat the odds and earn a college degree, they still face challenges. The Georgetown study found that kindergartners from low socioeconomic status families who scored in the top 25% and later earned college degrees had a 76% chance of reaching high socioeconomic status by the age of 25.

By comparison, their low-scoring, high socioeconomic status peers who earned college degrees compared had a 91% chance of maintaining their status. 

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Carnevale says there are several variables that contribute to this dynamic.

"People tend to blame the schools, and they are at fault for not saving people who start out smart," he says. "But there are also a variety of factors that have to do with race and class and gender and everything from books in the home to how many words you know when you're in the 1st grade, too. Disadvantage and advantage are very complex."

The Georgetown study also explores the impact of the additional advantages experienced by the children of wealthy families. In 2016, families from the highest income quintile spent about $8,600 per year on child enrichment activities while families in the lowest quintile spent closer $1,700.

"When we follow these kids over all those years, grade by grade, what we find out is they all stumble. The difference is between who stumbles and gets back up again and who stumbles and doesn't," Carnevale says. He believes that if resources and support can help low-scoring advantaged students overcome challenges and reach success, similar support could also help high-scoring disadvantaged students.

Carnevale points to wide range of public policies that could help address educational inequality, including universal preschool, equitable K-12 school funding, diversifying schools with high- and low-performing students in the same classes, ensuring stable living wages for parents and fostering safe schools and neighborhoods.

"These are not cheap and easy things to do, and [don't] happen overnight, but we've never built comprehensive policies that begin with the neighborhood or the school."

While some, he says, may argue that the cost to implement these policies would be too high, "the other view, which is also accurate, is that the economic loss in human capital and human capabilities is equal to the cost."

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