Publication Date

6-2014

Abstract

On average, education accounts for about 2 percent of total annual expenditures by U.S. consumers, but this percentage varies greatly by demographic. Some groups appear to spend much more than others, so it is natural to question what influences this variation in spending.

A popular conception is that racial and ethnic groups value higher education differently. In economic terms, this is a reflection of the value of human capital—how much people are willing to invest in their children’s education. The notion that some groups invest more than others is often based on average participation rates but does not account for actual expenditures or the expenditures when you consider socioeconomic differences. This Beyond the Numbers article looks at the amount of money invested in education by different race and ethnic groups and examines different factors that could contribute to the differences in expenditures.

We find that race and ethnicity groups do, on average, spend vastly different amounts on education, but the likelihood of going to college (and thus having education expenditures) and socioeconomic factors have the most influence on families’ investment in higher education—and race and ethnicity is not the driving factor, as commonly thought.

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Suggested Citation
Lou, T., Holden, R. J. (2014). Do different groups invest differently in higher education? Beyond the Numbers (Vol. 3, No. 13). Washington, DC: Bureau of Labor Statistics.

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