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The Disparate Wealth Paths for College Grads of Different Races/Ethnicities June 29, 2017 Transcript William Emmons: If you look at white or Asian families with college degrees-- four-year college degrees-the increase was almost double on the order of 90%, the median '92 versus the median 2013. And these are adjusted for inflation. So this is a real doubling of the wealth, what that wealth could buy over that time period. Compare that with white and Asian families that did not have four-year college degrees, there was actually a decline after adjusting for inflation over this period. And this I think conforms with the narrative we all have heard that college is very important as Ray said for building wealth and income, all sorts of other outcomes. Very much consistent with what we expected to find. But then when we look at the other two groups, things looked very different. So among Hispanic college graduates, there was a 27% decline between the '92 and the 2013 median after adjusting for inflation. And among Black college graduates, it was a 56% decline. A very, very substantial loss of wealth for the similarly situated families in those two distributions. So that's the first sense in which this is a very surprising finding. Very different outcomes for college graduates depending on whether it's a white or Asian versus a Hispanic or Black family. The other surprising aspect was that among whites and Asians, there's a clear stronger performance among college graduates, whereas for Black and Hispanic families, it's the reverse. Black and Hispanic college graduate families fared worse than noncollege families of the same race or ethnicity. So in both of those census, we were very surprised and as Ray said we wanted to really dig into that and try to think what is going on. A college degree has long been thought to improve the wealth prospects of those who hold them. However, recent research suggests that may be true for some people, but not for everyone. In this video, William Emmons discusses how the median wealth of white and Asians with college degrees has nearly doubled in real terms from 1992 to 2013, yet the median wealth of blacks and Hispanics with college degrees actually fell during that period. 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