College Graduation and Wealth Accumulation: Blacks’ Diminished Returns

Background: Based on the Minorities’ Diminished Returns (MDRs) framework, indicators of high Socioeconomic Status (SES), such as high maternal educational attainment, show weaker protective effects on various developmental, behavioral, and health outcomes for Black than White families. As a result of these MDRs, families and individuals with high educational attainment still report high levels of depression, smoking, obesity, and chronic disease. Limited knowledge exists on MDRs of maternal education on indicators of wealth such as home ownership and home value. Aims: Built on the MDRs framework, we tested the hypothesis of whether the effects of maternal educational attainment at birth on home ownership and home value, as proxies of wealth, vary between Black and White families. We hypothesized that: 1) high maternal education would be associated with more wealth 15 years later, and 2) compared to Whites, Blacks would be less likely to accumulate wealth (own a house) across all educational levels, given a weaker boosting effect of maternal educational attainment on wealth for Black than White families. Methods: The Fragile Families and Child Well-being Study, is a 15-year follow up study of a random sample of births in cities larger than 200,000 population in the US. A total number of 2004 White or Black youth were included and were followed from birth to the age of 15. The predictor of interest was maternal educational attainment at birth, treated as a categorical variable (college graduation). The outcomes were home ownership and home value (worth-owed) 15 years later, as proxies of wealth. Logistic and linear regression were used for data analysis. Results: High maternal education at birth was associated with home ownership and higher value of owned home at age 15. We also found that maternal educational attainment at birth and race interact with each other, suggesting that the effects of high maternal educational attainment at birth on home ownership/value at age 15 were weaker for Black than White families. Conclusions: Diminished returns of maternal educational attainment at birth on wealth accumulation in Black families may be a mechanism that contributes to racial health disparities in high socioeconomic status and also poor outcomes of high SES Black families. That is, a smaller effect of maternal educational attainment on changing the real lives of Black than White youth may be one of the mechanisms by which health remains worse than expected in high SES Black families. Not all of the health, behavioral, and developmental disparities are due to the racial gap in SES but also diminishing returns of socioeconomic status indicators such as maternal educational attainment for racial minorities. Research should study how social stratification, discriminatory mortgage and banking, residential segregation, family formation, employment, and occupational prestige reduce Black families’ ability to mobilize their human capital and secure tangible economic and non-economic outcomes