Essays on Race and Finance

In my first chapter, I show a positive municipal financing shock has heterogeneous effects on academic achievement. White students show meaningful improvement, but Black and Hispanic students do not. Consequently, the achievement racial gap widens following the shock. Changes in school funding do not explain this phenomenon; rather, it is explained by heterogeneous outcomes in household Socioeconomic Status (SES). These results highlight the possibility that a credit shock-induced increase in government spending could unexpectedly increase the local racial disparity. The second chapter examines the role of race and racial concordance between financial advisors and their local community. There are significant differences in stock market participation based on community racial composition as well as differences in the characteristics of communities served by minority advisors. Notably, minority advisors are more likely to serve racially concordant communities. We find that racial concordance has only a modest relation with local stock market participation. However, while minority advisors are more likely to drop out of the industry, this relation is mitigated among advisors located in more concordant communities