Understanding America: Unequal Economic Returns of Years of Schooling in Whites and Blacks

Higher schooling is associated with higher economic wellbeing. Marginalization-related Diminished Returns (MDRs) framework, however, refers to smaller returns of schooling for non-Hispanic Blacks (NHBs) compared to non-Hispanic Whites (NHWs).

Using a national sample of American adults, the current study compared NHBs and NHWs for the effects of each incremental increase in the years of schooling (gradient of educational level) on economic wellbeing of American adults.

Data came from the Understanding America Study (UAS), a national online survey with a nationally representative sample. A total of 5715 adults (18+ years old) were included. From this number, 4,826 (84.4%) were NHWs, and 889 (15.6%) were NHBs. Years of schooling was the independent variable. Economic wellbeing was the main outcome. Age and gender were the covariates. Race was the moderator.

Overall, each additional year of schooling was associated with higher economic wellbeing, net of age, and gender. A statistically significant interaction was found between race and years of schooling on the outcome, indicating a smaller boosting effect of any incremental increase in the years of education on the economic wellbeing of NHBs compared to NHWs.

In line with MDRs, highly educated Black people experience low economic wellbeing. The MDRs of education on economic wellbeing may be why highly educated, and middle-class Black Americans still report poor health. Policy solutions should address multi-level causes of MDR-related health disparities.