Does Financial Literacy Betray Racial Bias?

Thursday, April 20, 2017
The Chronicle of Higher Education

"The problem with this language is the implicit notion that the racial wealth gap is a matter of financial literacy, choice, and agency, as opposed to inheritance and structure," write Darrick Hamilton, an associate professor of economics and urban policy at the New School, and William A. Darity Jr., a professor of public policy, African and African American studies, and economics at Duke University.

The paper was published in the most recent issue of the Federal Reserve Bank of St. Louis Review.

Financial-literacy programs, which often include counseling on how to manage credit-card debt and student loans, have come ever-more in vogue in higher education over the last decade. Amid growing scrutiny over the cost of college and concerns about prospective earnings for graduates, a number of colleges have encouraged or required students to participate in some form of education on the basics of personal finance. The Department of Education has given competitive preferences for some grant awards to institutions that provide such programming, and lawmakers in some states have pushed for colleges to offer it.

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