Graduated from college? Chances are you’ll be able to get through an economic recession, unless, of course, you’re black or Latino.
You read that correctly!
In a study from the Federal Reserve Bank of St. Louis, researchers found that higher education doesn’t offer those of a brown or black hue the same kind of protection it does white and Asian people who have matching four-year college degrees.
Studying both the 2007 and 2013 periods, authors William Emmons and Bryan North learned that the education-wealth gap exists in both long-term and short-term cases of economic downturn.
According to the report, between 2007 and 2013, black families headed by someone with a college degree experienced a median wealth decline of 60 percent. For Latinos, the loss was even greater. College-educated Hispanic households felt a 72 percent drop to their median real net worth. In contrast, white families headed by someone with a four-year college degree witnessed a 16 percent drop in wealth, while equally educated Asian households actually gained 5.1 percent more in their median real net worth.
While the report doesn’t explain why these inequities exist among higher-educated families of different races, Emmons and North do suggest that debt might play a major role. For instance, in 2007, black and Latino households had median debt-to-income ratios that far exceeded white and Asian families.