Authors
Abstract
Policies aimed at increasing higher education attainment are central to efforts aimed at eliminating racial gaps in earnings, employment and labor force participation (LFP). We use data from the American Community Survey (ACS) spanning 2008-2016 to investigate the returns to higher education by racial groups with particular attention to the returns realized by American Indian and Alaskan natives (AIAN). First, we find that there are sizable gaps in earnings, employment, and LFP. On average AIAN earn 15 percent less, have 6.2 percentage point lower employment rates, and 10.0 percentage point lower LFP rates than white Americans even after controlling for differences in education and experience. Next, while all workers experience sizable returns to education, the returns to education are different by racial group. We find that AIAN college graduates reap larger returns in terms of LFP and employment but experience smaller gains in earnings than otherwise similar white college graduates. These results suggest that policies promoting higher education are necessary but not sufficient to address white-AIAN labor market disparities. We simulate LFP, employment and earnings under the hypothetical case in which the distribution of AIAN higher education increases to match that of whites and estimate that, even under this very optimistic scenario, white-AIAN labor market disparities would remain stark.
