The Bureau of Labor Statistics of the U.S. Department of Labor is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy.
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S P E C I A L S T U D I E S A N D R E S E A R C H
Do different groups invest differently in
higher education?
By Tian Luo and Richard J. Holden
On average, education accounts for about 2 percent of total annual expenditures by U.S. consumers, but this
percentage varies greatly by demographic.1 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
June 2014 | Vol. 3 / No. 13
U.S. BUREAU OF LABOR STATISTICS
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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.2
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.
Education expenditures and participation rates for all
households
For this study, we analyzed 90,872 observations from the Consumer Expenditure Survey (CE) for years 2008
through 2010, and the results indicate that there is more to the story than average expenditures by race and
ethnicity.
Consumer expenditure data on U.S. households show that, on average, U.S. households spent $357 per year on
higher education between 2008 and 2010. Hispanic and African American households spent less for tuition than
White households, by 57 percent and 69 percen