Illustration by Nicholas Weltyk

Obama’s G.I. Bill Fixation Could Wreak Havoc

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Jan. 28 (Bloomberg) -- As President Barack Obama delivers a State of the Union address tonight devoted to social mobility and rising inequality, it’s a safe bet that he will single out the GI Bill for special mention, as he has done in the past.

Such programs are credited by politicians of all stripes with creating a strong middle class, and as a possible model for restoring the American Dream, which is under threat in this age of inequality. Last month, Obama said that Americans have seen “time and again” that government “can make an enormous difference in increasing opportunity and bolstering ladders into the middle class.” For the president, this was personal: “I’m only here because this country educated my grandfather on the GI Bill.”

Unfortunately, that narrative isn’t quite right. Not because government intervention can’t help people. But because the history of these programs is more complicated than our hazy, romantic recollections would suggest.

In popular imagination, the Serviceman’s Readjustment Act of 1944, as the GI Bill was formally known, gave poor, working-class veterans, many of them children of immigrants, the resources to claw their way into the ranks of the middle class. These included business loans as well as loans to finance the purchase of homes and farms; unemployment benefits to help underwrite job searches; and most important of all, tuition and stipends to pursue education and obtain job training.

Such assistance undoubtedly helped Obama’s grandfather and many other families. But when it comes to formulating public policies that affect hundreds of millions of people, the president’s familial experience may not be the best guide. Take a close look at how the GI Bill worked in the aggregate, and the results aren’t reassuring.

Harvard University historian Lizabeth Cohen demolished the myth of the GI Bill in her magisterial history of the postwar era, “A Consumers’ Republic.” Digging deep into surveys of returning veterans, Cohen found that the program wasn’t as effective as conventional wisdom would suggest. It also had many unintended, even unfortunate consequences.

Women, most obviously, found themselves most disadvantaged. Returning veterans were overwhelmingly male, and they reaped the overwhelming share of the benefits. This would have perverse effects, particularly in higher education.

For example, as men flooded the nation’s colleges and universities -– by 1948, half the nation’s undergrads were veterans -– the gender balance tipped decisively. Schools reduced female admissions to make room for male veterans. Similar dynamics played out in medical and professional schools, many of which had begun admitting women during the war, only to marginalize them afterward.

The GI Bill’s educational benefits also produced far less social mobility than is generally assumed. About 55 percent of returning vets lacked a high school degree, and they overwhelmingly used their government benefits to pursue vocational training. This got them better-paying jobs on the factory floor, but it didn’t propel them into the middle class. By contrast, it was the minority of veterans who already had a high school degree, college experience or a college degree who used their benefits to pursue higher education. Working from postwar surveys, Cohen found that most of those who used the GI Bill to go to college were already in the middle class or destined for it.

Cohen found some confirmation for this finding in data from a survey of veterans at the most select colleges and universities. When asked if they could have gotten a college degree without the GI Bill, only 20 percent said “definitely” not or “probably” not. In short, many didn’t necessarily need the help.

This isn’t to suggest that the GI Bill was a failure. Certainly, it allowed some men who wouldn’t have gone to college to do so, and some men made it into the middle class as a consequence. But the educational benefits of the GI Bill accrued largely to the people who needed it least. A 1951 University of Chicago study concluded that GI benefits “actually played a very minor role,” in helping veterans climb the socioeconomic ladder. More recent studies have corroborated this finding.

The same holds true of the other benefits of the GI Bill. Cohen found, for example, that working-class veterans rarely obtained loans via the GI Bill because bankers thought they lacked the necessary security or payment history. Instead, it was the vets who had a college education or had worked in professional fields who got the loans. Little wonder that one union organizer concluded that “The GI Bill of Rights is a wonderful piece of legislation, but it is meaningless.”

That may be an exaggeration, but it hints at a deeper truth, not only about the GI Bill but also about initiatives aimed at fostering social mobility in the U.S. Many such initiatives -- the GI Bill or even the mortgage-interest deduction -- are better suited for helping people who are already middle class rather than those who aspire to it. Simply put, they’re middle-class entitlement programs.

That doesn’t mean they’re a bad idea, or they don’t pay dividends. But as the president grapples with how best to foster social mobility in the 21st century, he should take a harder look at the record of past initiatives, and come up with proposals that actually foster genuine change, rather than affirm the status quo.

(Stephen Mihm, an associate professor of history at the University of Georgia, is a contributor to the Ticker. Follow him on Twitter at @smihm.)

To contact the writer of this article: Stephen Mihm at

To contact the editor responsible for this article: Max Berley at