Is Financial Equality Possible? Race Disparities in Wealth

Higher education is considered one of the most reliable routes to higher pay.  A recent  study reported in a Federal Reserve publication suggests that how much higher one can climb up the pay ladder is race dependent. 

William Emmons and Bryan Noeth report that higher education does increase income and wealth for all racial and ethnic groups.  And protection from accumulated wealth increases, as well.  The problem is that how much protection is afforded varies with Blacks and Latinos afforded lower rates of wealth protection.  The study’s findings suggest that advanced degrees, most available to whites and Asians, may be a protective factor in preserving wealth.  Findings also indicate that in some ways, when economic crisis occurs college educated blacks and Latinos may fare worse, percentage-wise, in preserving their wealth than their less educated counterparts. 

Nonetheless, all racial and ethnic groups studied improved their economic positions considerably by completing a course of higher education.  Why there is disparity in wealth preservation when crisis occurs remains speculative, however. The authors conclude that the reasons for this disparity are likely complex and call for further studies on the sociological and societal reasons for the discrepancies.