California has great wealth but also one of the highest poverty rates in the nation. The ability of Californians to move up the income ladder often depends on acquiring the education and skills needed for higher-paying jobs. But despite the state's increasingly knowledge-based economy, too few Californians are earning a college degree. This report examines the importance of higher education--particularly bachelor's degrees--in promoting economic mobility. First, the many benefits of a college degree are summarized. Second, the challenges of fully realizing the potential of higher education as an engine of economic mobility are described. Finally, the progress that has already been made and what else needs to be done to ensure upward mobility for all California children is considered. Among the key findings are: (1) A college degree confers multiple benefits; (2) Not all Californians have the same chance to experience these benefits; and (3) California must build upon its recent progress. [This report was completed with with research support from Sergio Sanchez.]