Black parents demonstrate an outsized commitment to using their limited resources to invest in their children’s education, a new study concludes. And that investment pays off, bringing their children to near parity in terms of educational achievement with their white counterparts.
Black families contribute to higher education with a median net worth of only $24,000, the study found, while white families provide support with a much higher median net worth of more than $168,000 -- a nearly 19 to 1 difference.
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Black parents demonstrate an outsized commitment to using their limited resources to invest in their children’s education, a new study concludes. Jennifer Blocker PPS'12 had lots of family support at her Duke graduation.
“Bootstraps Are For Black Kids: Race, Wealth, and the Impact of Intergenerational Transfers on Adult Outcomes,” was co-authored by William Darity, the Samuel DuBois Cook Professor of Public Policy, African and African American Studies, and Economics at Duke, Darrick Hamilton of The New School, Yunju Nam of the State University of New York, Buffalo, and Anne Price of The Insight Center for Community Economic Development.
“Data on intergenerational transfers of economic resources for higher education is limited,” said Darity, director of the Samuel DuBois Cook Center on Social Equity at Duke. “However, this type of parental financial support might ultimately prove to be a decisive factor determining the racial wealth gap in the next generation.”
The study is based on the 2013 Panel Study of Income Dynamics (PSID) that found the racial wealth gap might be one of the main mechanisms for perpetuating economic inequality. Using PSID data collected between 1982 and 2013 researchers began to investigate the relationships between parental income and wealth, parental financial support, and their child’s economic achievement. The study distinguished three types of parental financial support – support for higher education, support for home ownership, and support for “other purposes.”
Researchers found that parental financial support for education has the strongest positive association with adult outcomes among the three categories. Blacks and whites who received any parental support for education experience better outcomes than their counterparts who never received such support for every outcome examined: educational attainment, home ownership, income, and net worth.
“Black parents who are able to contribute to their child’s education are better able to transfer their own socioeconomic status to the next generation,” said Price, managing director and chief asset officer for the Insight Center. “However, it’s important to remember that while parental support for education lowers black/white disparities in education and home ownership, there is little variation in racial gaps in income and wealth.”
Despite the findings that over half of the blacks who received parental help have a graduate education, stark racial differences in both income and net worth persist. Among those who received financial support from parents, the median income is $98,066 for whites and $69,306 for blacks. Median net worth is $63,000 and $35,996, respectively.
The study was released by Insight Center for Community Economic Development and is part of the National Asset Scorecard and Communities of Color project, supported by the Ford Foundation. The study can be found online at www.insightcced.org.