Tuesday, June 10, 2014

Households With Similar Incomes And Parental Education Levels, Across All Race And Ethnic Groups, Have Essentially The Same Higher Education Expenditure Levels

From US Dept of Labor, Bureau of Labor Statistics, Beyond the Number, "Do different groups invest differently in higher-education?" by Tian Luo and Richard J. Holden:
When we analyzed the households with a college student with a tuition expenditure, and accounted for the household income and education level of the parents, we found that the differences in tuition expenditures between races and ethnicities converge. For college students with tuition expenditures who have parent(s) with a bachelor’s degree and a median annual income of $70,000, Hispanics and African American households had tuition expenditures that were only 11 and 8 percent lower, respectively, than those made by White households, while Asians had 9 percent higher tuition expenditures than White households. (See chart 3.)
Household Tuition Expenditures
Source: US Bureau of Labor Statistics

However, these much smaller differences in tuition expenditures are not actually statistically significant. In other words, when you compare families with similar household incomes and parental education levels, the higher education expenditure levels are essentially the same across all race and ethnic groups. As parents' education and income level increase, so do the expenditures for higher education. From another perspective, socioeconomic differences, not differences in race or ethnicity, have a greater influence on how families value higher-education investments.

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