The myth of closing the racial wealth gap through education
On average, Black households in the U.S. with heads who have completed a college degree have less net worth than white households headed by someone with less than a high school education.
Why it matters: It is only after completing advanced post-college work that the median Black household surpasses the median white household's net worth for a head with only a high school degree.
- Even then, the average Black earner has about half as much wealth as the average white earner with just a college degree.
What we're reading: "Family wealth is a predictor of both college attendance and college completion," notes a 2018 study from the Insight Center for Community Economic Development.
- "Black students are more likely to take on student loans and accumulate student loan debt, and they are more likely than white students to drop-out of a university because of financial concerns. Ironically, their wealth position could deteriorate because of their intense motivation to pursue higher education."
One level deeper: "Another commonly held misconception is that Black families have a cultural predisposition to under-value education."
- "However, the best evidence indicates that Black families, controlling for household type and socioeconomic status, tend to be more supportive than white families of their children’s education through direct financial support."
- "Black parents who provide some support for their children’s higher education have two-thirds of the median net worth of white parents who provide no support for their children’s higher education.
- "For given levels of household income, parental educational attainment, and/or parental occupational status, Black youth also get more years of schooling and acquire more credentials than white youth whose parents have a similar status."
Go deeper: Dallas Fed chief says systemic racism drags down the U.S. economy