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

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  • 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
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    References listed on IDEAS

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    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.
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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    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.

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    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

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