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Racial Inequality: Returns to Educational Investments

The past four decades have witnessed considerable changes in both the supply of college-educated adults and the demand for skilled labor. Investing in human capital through education has historically produced high returns. However, those most underrepresented in education (racial minorities in particular) have historically received the lowest returns for their investments. This trend indicates both socioeconomic and racial inequality in returns to education. However, this pattern appears to be disappearing. Recent cohort studies of trends in returns to education indicate that individuals least likely to complete more education appear to earn higher rewards in earnings.

Historical Variation in Returns to Education

Research has shown that each additional year of education and each additional educational credential are associated with higher earnings, higher-status careers, and greater life satisfaction. ...

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