Dissecting Unequal Returns to Educational Pathways across Race/Ethnicity, Gender, and Disadvantaged Background

Background and Purpose: A postsecondary degree is a key driver of individual economic stability and upward social mobility and is associated with several favorable outcomes, such as higher rates of employment, longer employment tenure, and increased earnings (Gonzalez et al., 2023); however, these benefits are not equally distributed across gender, race/ethnicity, and socioeconomic background (Carnevale et al., 2021). Yet, few studies have examined the variation by race/ethnicity, gender, and disadvantaged background in the longitudinal association between various degree pathways, including “some college, no degree (SCND),” and wage trajectories. Such analysis is needed to advance equitable outcomes in the educational and labor markets.

Methods: This study utilizes linked-administrative data from the Maryland Longitudinal Data System (MLDS). The MLDS includes population-level records from the State Department of Education, the Higher Education Commission, and the Department of Labor. The study followed a cohort of 8th grade public school students, applying discontinuous growth curve modeling in STATA v15 to examine the relationship between educational attainment and log-transformed, inflation-adjusted wages over 31 financial quarters post-high school graduation (i.e., June 2012 to March 2020). Quarterly wages were measured using data from Maryland’s Unemployment Insurance file. The final sample included 40,243 individuals and 604,857 observations. These methods enabled us to estimate the change in level and slope of wage trajectories associated with college enrollment, degree attainment, and college departure without a degree.

Results:

Descriptive statistics showed that students in the sample were White (42%), Black (42%), Asian (4% ), and Other (13%). Fifty-five percent of students were male, and 52% were eligible for free and reduced-price meals. Most students were pursuing postsecondary education in Maryland in either two-year (39%) or four-year colleges (24%). Findings show that wage levels and slopes varied based on gender and race/ethnicity; for example, Black students experienced an initial wage penalty of 28.5% compared to White students. Furthermore, findings show that on average, degree completers earned significantly higher wages, particularly for Bachelor’s degree recipients, than those with a high school diploma. However, preliminary findings suggest the benefits of degree attainment varied across gender, race/ethnicity, and disadvantaged background. For example, for Blacks compared to whites of the same gender and disadvantaged background, a bachelor’s degree provides a 15% greater boost but an 8% flatter subsequent growth rate. Thus wage gaps are predicted to persist, even after accounting for postsecondary degree attainment.

Conclusions and Implications:

The pronounced demographic disparities in the wage trajectories of college degree earners observed in this study highlight the importance of further research that explains this variation, leading to targeted policy interventions with the goal of equalizing the value of college for all.