Inequality at the top. Educational expansion, financial constraints and opportunities of university graduation by social origin

There is evidence that the increase of educational and social mobility that characterised the middle decades of the twentieth century slowed down at the turn of this century, in spite of persistent expansion of higher education. At the same time, income inequality and welfare retrenchment increased. Applying a two-stage design to a merge of individual level-data from the PIAAC-Survey of Adult Skills (OECD) and country-level data on educational expansion, income inequality and regime of higher education finance drawn from different sources, we test the relative importance of these three factors in the explanation of equality of opportunities of university graduation by social origin. We select individuals who were 25-45 years old in the survey year. Our two-stage design shows a negligible role of higher education expansion, whereas income inequality and the regime of higher education finance are more consequential in explaining cross-national differences in opportunities of university graduation by social origin. Inequality of university graduation by social origin is significantly increased with income inequality and reduced in systems of tertiary education characterised by low fees and high subsidies provided to students.