Charts of the Week: Black-white inheritance gap; HBCUs; for-profit colleges

Figure 3

In this edition of Charts of the Week: the inheritance gap contributes to the Black-white wealth gap; and some perspectives on race and higher education. For more, visit the Race, Prosperity, and Inclusion Initiative.

Figure 3Researchers from the Hamilton Project at Brookings look at how wealth contributes to a household’s ability to meet economic shocks from the coronavirus pandemic. The wealth gap between Black and white households has many causes, one of which is the intergenerational transfer of wealth via inheritances. In 2019, for example, 30 percent of white households received an average inheritance of nearly $200,000, while only one in 10 Black households did, at $100,000 on average. “Because inheritances are lightly taxed,” they observe, “inequalities in inheritances play a significant role in perpetuating a Black-white wealth gap that spans generations.”

Writing for the Brown Center Chalkboard, Dick Startz says that while historically Black colleges and universities (HBCUs) “have been supplying leaders to the nation and to communities for nearly 200 years,” they “work their magic with very little money.” Startz examines data related to HBCU performance and finances, including the fact that the expected family contribution for students at HBCUs is much lower than at non-HBCUs, “which is another way of seeing that HBCUs serve students whose families just don’t have much money.”

For profit collegeAriel Gelrud Shiro and Richard Reeves observe that for-profit colleges, which have rebounded under Trump-era deregulation, “yield higher debts and poorer labor market outcomes for students when compared to other forms of postsecondary education.” And, while Black and Latino students constitute less than a third of all college students, they represent nearly half of enrollment in for-profit colleges as a result of, say Shiro and Reeves, “predatory recruitment tactics targeted at Black and Latino communities.”