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College Attainment Gaps Grow among Races/Ethnicities June 15, 2017 Transcript William Emmons: Has college itself become an engine of widening disparities? And the sense in which this-- I think this is, in a sense, almost undeniable is that our economy has changed and has been changing for many, many years in the direction of rewarding skills associated with college and advanced education. That's the way the world is moving. And if we have different abilities of people of different races and ethnicities to achieve those skills, that will automatically mean that they will be differentially able to capitalize on or to earn those skill premiums. And so in a sense, this is really a challenge to colleges and universities, but everybody else who's interested in this question. How can we make college actually an engine of greater mobility? Convergence of wealth. OK, so that's what I'm getting at. These are numbers from the Department of Education, and this is summarized in a short article, I'm going to show you the full titles of the articles at the end, where we looked at college attainment. So these are the fraction of adults 25 and over that have achieved a four-year college degree. This was as of 2015, so anybody who was 25 years or older in 2015, did they have a four-year college degree or not? And it's separated out by the same groups that we talked about before and also by when you were born because I want to see what's happening with successive cohorts of people. So people born during World War II or before, sometimes called the Greatest Generation, in the first quarter of the century, the Silent Generation, and then the baby boomers are here, born in 1946 through the mid '60s. This is what people called Generation X, people born in the late '60s and '70s. And then the millennials. We now have a little bit of data on people born in the 1980s. So this shows, for each birth cohort, so this is actually five years centered on one of these years ending in 0 or 5, or I show the years there, for each of these groups. And so one thing that's clear is there's an upward trajectory for the groups over time. Again, very consistent with what we all think we know, that educational attainment has been rising fairly steadily for quite a long time. The millennials are the best educated generation ever. But if you look closely, you'll see there's been some flattening. So that particularly, say, look at whites. There's been very little change in the last really 20 years of this group. Same is true for African Americans and Hispanics. There's been a flattening out. Only Asians, you might say, continue to have still some upward trajectory. So if you express these numbers as differences compared to white college, four-year college attainment rates, you get this pattern, and you look at it. You say there's kind of generally a downward slope. So compare-- let's compare the millennials to, say, people born in the first half of the 20th century. There's about a 10 percentage point decline. That is, the gap has gotten bigger. The gap in attainment rates for Black and Hispanics versus whites and of course also Asians has gotten 10 percentage points bigger over that time period. Given the rewards that our economy is providing to college graduates, that in itself means that there will be lower incomes, lower wealth for the groups whose attainment is not keeping pace with whites and Asians. From the Greatest Generation through millennials, successive generations are generally more educated than the previous. However, another trend appears to have emerged as well: The gaps in college attainment rates between whites and other races and ethnicities seem to be growing as well. In this video, William Emmons examines these trends. Emmons is an assistant vice president and economist with the St. Louis Fed and the lead economist with the St. Louis Fed’s Center for Household Financial Stability. This video was taken from a recent Dialogue with the Fed presentation. To see the rest of the presentation, visit “Does College Level the Playing Field?” Additional Resources • Dialogue with the Fed: Does College Level the Playing Field? • On the Economy: The Importance of Exploring the Black/White Wealth Gap • On the Economy: The Link between Family Structure and Wealth Is Weaker Than You Might Think