Perceived and Ideal Inequality in University Endowments in the United States

Abstract

Whether and which university to attend are among the most financially consequential choices most people make. Universities with relatively larger endowments can offer better education experiences, which can drive inequality in students’ subsequent outcomes. We first explore three interrelated questions: the current educational inequality across U.S. universities, people’s perceptions of this inequality, and their desired inequality. Educational inequality is large: the top 20% of universities have 80% of the total university endowment wealth while the bottom 20% have around 1%. Studies 1 to 3 demonstrated that people underestimate university endowment inequality and desire more equality. These perceptions and ideals were mostly unaffected by contextual factors (e.g., salience of endowment consequences, distribution range) and were not well explained by participants’ demographics. Finally, Study 4 revealed that learning about current endowment inequality decreased tolerance of the distribution of university wealth. We discuss the implications of awareness of educational inequality for behaviors and educational policies.