IDEAS home Printed from https://ideas.repec.org/a/fip/fedlrv/00073.html
   My bibliography  Save this article

The Political Economy of Education, Financial Literacy, and the Racial Wealth Gap

Author

Listed:
  • William A. Darity
  • Darrick Hamilton

Abstract

This article examines the mismatch between the political discourse around individual agency, education, and financial literacy, and the actual racial wealth gap. The authors argue that the racial wealth gap is rooted in socioeconomic and political structure barriers rather than a disdain for or underachievement in education or financial literacy on the part of Black Americans, as might be suggested by the conventional wisdom. Also, the article presents a stratification economic lens as an alternative to the conventional wisdom to better understand why the racial wealth gap persists.

Suggested Citation

  • William A. Darity & Darrick Hamilton, 2017. "The Political Economy of Education, Financial Literacy, and the Racial Wealth Gap," Review, Federal Reserve Bank of St. Louis, vol. 99(1), pages 59-76.
    • Handle: RePEc:fip:fedlrv:00073
    DOI: 10.20955/r.2017.59-76
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.20955/r.2017.59-76
    File Function: http://dx.doi.org/10.20955/r.2017.59-76
    Download Restriction: no
    File URL: https://files.stlouisfed.org/files/htdocs/publications/review/2017-02-15/the-political-economy-of-education-financial-literacy-and-the-racial-wealth-gap.pdf
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.20955/r.2017.59-76?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Francine D. Blau & John W. Graham, 1990. "Black-White Differences in Wealth and Asset Composition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 321-339.
    2. Patrick Mason, 1997. "Race, culture, and skill: Interracial wage differences among African Americans, Latinos, and whites," The Review of Black Political Economy, Springer;National Economic Association, vol. 25(3), pages 5-39, March.
    3. N. Chiteji & Darrick Hamilton, 2002. "Family connections and the black-white wealth gap among middle-class families," The Review of Black Political Economy, Springer;National Economic Association, vol. 30(1), pages 9-28, June.
    4. Janelle Jones & John Schmitt, 2014. "A College Degree is No Guarantee," CEPR Reports and Issue Briefs 2014-08, Center for Economic and Policy Research (CEPR).
    5. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    6. Menchik, Paul L & Jianakoplos, Nancy Ammon, 1997. "Black-White Wealth Inequality: Is Inheritance the Reason?," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 428-442, April.
    7. Galenson, Marjorie, 1972. "Do Blacks Save More?," American Economic Review, American Economic Association, vol. 62(1), pages 211-216, March.
    8. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    9. Mason, Patrick L., 1997. "Race, culture, and skill: interracial wage differentials among African Americans, Latinos, and whites," MPRA Paper 11329, University Library of Munich, Germany.
    10. Ray Boshara & William R. Emmons & Bryan J. Noeth, 2015. "The Demographics of Wealth - How Age, Education and Race Separate Thrivers from Strugglers in Today's Economy. Essay No. 2: The Role of Education," Demographics of Wealth, Federal Reserve Bank of St. Louis, issue 2, pages 1-28.
    11. William Darity & Darrick Hamilton & James Stewart, 2015. "A Tour de Force in Understanding Intergroup Inequality: An Introduction to Stratification Economics," The Review of Black Political Economy, Springer;National Economic Association, vol. 42(1), pages 1-6, June.
    12. William R. Emmons & Tasso Pettigrew & Lowell R. Ricketts, 2016. "Choosing to Fail or Lack of Choice? The Demographics of Loan Delinquency," In the Balance, Federal Reserve Bank of St. Louis, issue 15, pages 1-3.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Terri Friedline & Zibei Chen & So’Phelia Morrow, 2021. "Families’ Financial Stress & Well-Being: The Importance of the Economy and Economic Environments," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 34-51, July.
    2. Lu Fan & Swarn Chatterjee & Jinhee Kim, 2022. "An Integrated Framework of Young Adults’ Subjective Well-Being: The Roles of Personality Traits, Financial Responsibility, Perceived Financial Capability, and Race," Journal of Family and Economic Issues, Springer, vol. 43(1), pages 66-85, March.
    3. Rodney D. Green & Sue E. Houchins, 2017. "Black Progress Through Business Improvement: Two Articles by Joseph R. Houchins, 1900-1989," The Review of Black Political Economy, Springer;National Economic Association, vol. 44(3), pages 393-401, December.
    4. William A. Darity & Raffi E. García & Lauren Russell & Jorge N. Zumaeta, 2024. "Racial Disparities in Family Income, Assets, and Liabilities: A Century After the 1921 Tulsa Massacre," Journal of Family and Economic Issues, Springer, vol. 45(2), pages 256-275, June.
    5. Juliet Elu & Miesha Williams, 2023. "COVID-19 Cryptocurrency Investment: Wealth Disparities and Portfolio Diversification," Journal of Economics, Race, and Policy, Springer, vol. 6(1), pages 53-59, March.
    6. Jean C. Bikomeye & Sima Namin & Chima Anyanwu & Caitlin S. Rublee & Jamie Ferschinger & Ken Leinbach & Patricia Lindquist & August Hoppe & Lawrence Hoffman & Justin Hegarty & Dwayne Sperber & Kirsten , 2021. "Resilience and Equity in a Time of Crises: Investing in Public Urban Greenspace Is Now More Essential Than Ever in the US and Beyond," IJERPH, MDPI, vol. 18(16), pages 1-39, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert B. Williams, 2017. "Wealth Privilege and the Racial Wealth Gap: A Case Study in Economic Stratification," The Review of Black Political Economy, Springer;National Economic Association, vol. 44(3), pages 303-325, December.
    2. N. Chiteji & Darrick Hamilton, 2002. "Family connections and the black-white wealth gap among middle-class families," The Review of Black Political Economy, Springer;National Economic Association, vol. 30(1), pages 9-28, June.
    3. Jermaine Toney & Darrick Hamilton, 2022. "Economic insecurity in the family tree and the racial wealth gap," Review of Evolutionary Political Economy, Springer, vol. 3(3), pages 539-574, October.
    4. Mathä, Thomas Y. & Porpiglia, Alessandro & Ziegelmeyer, Michael, 2017. "Household wealth in the euro area: The importance of intergenerational transfers, homeownership and house price dynamics," Journal of Housing Economics, Elsevier, vol. 35(C), pages 1-12.
    5. James E. CURTIS Jr., 2018. "Differences in wealth, evidence from structural regression decomposition, 1850-1870," Journal of Economic and Social Thought, KSP Journals, vol. 5(1), pages 42-55, March.
    6. Dionissi Aliprantis & Daniel R. Carroll & Eric Young, 2019. "The Dynamics of the Racial Wealth Gap," Working Papers 19-18R, Federal Reserve Bank of Cleveland, revised 29 Nov 2022.
    7. Chul‐Woo Kwon & Peter F. Orazem & Daniel M. Otto, 2006. "Off‐farm labor supply responses to permanent and transitory farm income," Agricultural Economics, International Association of Agricultural Economists, vol. 34(1), pages 59-67, January.
    8. Bunting, David, 2009. "The saving decline: Macro-facts, micro-behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 282-295, May.
    9. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    10. Lang, Harald, 1987. "Herman Wold on Optimal Properties of Exponentially Weighted Forecasts," Working Paper Series 179, Research Institute of Industrial Economics.
    11. Brautzsch, Hans-Ulrich & Günther, Jutta & Loose, Brigitte & Ludwig, Udo & Nulsch, Nicole, 2015. "Can R&D subsidies counteract the economic crisis? – Macroeconomic effects in Germany," Research Policy, Elsevier, vol. 44(3), pages 623-633.
    12. Sadullah Çelik & Yasemin Özerkek, 2008. "Panel cointegration analysis of consumer confidence and personal consumption in the European Union," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 10(2), pages 161-168, February.
    13. repec:spo:wpecon:info:hdl:2441/f0uohitsgqh8dhk9814kl7606 is not listed on IDEAS
    14. Ricardo Barradas & Ines Tomas, 2023. "Household indebtedness in the European Union countries: Going beyond the mainstream interpretation," PSL Quarterly Review, Economia civile, vol. 76(304), pages 21-49.
    15. Alok Bhargava, 2006. "Modelling the Health of Filipino Children," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 11, pages 153-168, World Scientific Publishing Co. Pte. Ltd..
    16. Iheonu O Chimere & Tochukwu Nwachukwu, 2020. "Macroeconomic determinants of household consumption in selected West African countries," Economics Bulletin, AccessEcon, vol. 40(2), pages 1596-1606.
    17. Klos, Alexander & Rottke, Simon, 2013. "Saving and Consumption When Children Move Out," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79786, Verein für Socialpolitik / German Economic Association.
    18. Christian Johnson & George G Kaufman, 2007. "Un banco, con cualquier otro nombre…," Boletín, CEMLA, vol. 0(4), pages 185-199, Octubre-d.
    19. Yi Wen, 2011. "Making sense of China’s astronomical foreign reserves," Working Papers 2011-018, Federal Reserve Bank of St. Louis.
    20. Nelson, Edward, 2017. "Reaffirming the Influence of Milton Friedman on U.K. Economic Policy," Working Papers 2017-01, University of Sydney, School of Economics, revised Feb 2017.
    21. Lorenzo Pozzi, 2003. "Tax Discounting in a High‐debt Economy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(3), pages 261-282, July.

    More about this item

    Keywords

    J15; Z13;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlrv:00073. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott St. Louis (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.