White College Graduates Are Doing Great With Their Parents' Money
The numbers are staggering: White Americans with a college degree are on average three times as wealthy as black Americans with the same credential, and in families whose head of the household is employed, white families have 10 times the wealth of black ones. One estimate on the conservative end suggested that this wealth gap could take two centuries to close.
And the thing about wealth, says Tatjana Meschede, a researcher at the Institute on Assets and Social Policy at Brandeis University, is that it’s “sticky”: It tends to stay with a family. That has serious repercussions for how much money people accumulate over the course of their lives, regardless of whether they attend college—something that is usually thought to make a significant difference financially.
A forthcoming study from Meschede and Joanna Taylor, also a researcher at Brandeis, in the American Journal of Economics and Sociology, makes the point clearly. Building on a 2017 study of theirs that examined wealth accumulation among college graduates—as well as “intergenerational financial transfers,” like when a parent helps a recent college grad out with rent or, say, gives her $1,000 a month to spend on whatever she pleases—the two looked specifically at how family inheritances, which are usually larger and tend to come all at once, factor into building and maintaining wealth.
Read the full article here.