Do Different Groups Invest Differently in Higher Education? Beyond the Numbers

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. The authors 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.