Racial wealth gap continues to grow regardless of college attainment
On average, black families in the U.S. have just five to 10 percent as much wealth as white families. One 2015 study showed that black households headed by a college graduate have roughly one-third less wealth than white households headed by a high school dropout. Yet for decades, we have held a near-universal belief in the power of education to lift people out of poverty, raise incomes, build wealth and close the racial wealth gap.
Getting a college degree is seen as a fundamental building block of the American Dream, in which hard work and merit generate broad economic mobility that will eventually correct these disparities. But is it true that the effects of education are powerful enough to close the country’s yawning racial wealth gap? Researchers from the Heller School’s Institute on Assets and Social Policy (IASP) decided to dig deeper into this question and determined that over time, college degrees contribute to wealth accumulation for white graduates—but not black graduates.
The 2017 study was published in the Federal Reserve Bank of St. Louis Review. Study author and IASP Associate Director Tatjana Meschede says, “The public understanding, or even the academic understanding, has been that if you get an education, you have a better chance of narrowing this wide racial wealth gap. That was our hypothesis. And of course we found the opposite.”
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