A college degree has long been recognized as a great equalizer, a path for minorities to help bridge the economic chasm that separates them from whites. But a report by the Federal Reserve Bank of St. Louis raises troubling questions about the ability of a college education to narrow the racial and ethnic wealth gap, The New York Times reports.
“Higher education alone cannot level the playing field,” the report concludes.
Economists emphasize that college-educated blacks and Hispanics earn significantly more and are in a better position to accumulate wealth than blacks and Hispanics who do not get degrees. Graduates’ median family income in 2013 was at least twice as high, and their median family wealth (which includes resources like a home, car and retirement account) was 3.5 to 4 times greater than that of nongraduates.
But while these college grads had more assets, the New York Times reports, they suffered disproportionately during periods of financial trouble.
From 1992 to 2013, the median net worth of blacks who finished college dropped nearly 56 percent (adjusted for inflation). By comparison, the median net worth of whites with college degrees rose about 86% over the same period, which included three recessions—including the severe downturn of 2007 through 2009, with its devastating effect on home prices in many parts of the country. Asian graduates did even better, gaining nearly 90%.
“The long-term trend is shockingly clear,” William R. Emmons, an economist at the Federal Reserve Bank of St. Louis and one of the authors of the report, told The New York Times. “White and Asian college grads do much better than their counterparts without college, while college-grad Hispanics and blacks do much worse proportionately.”
