Historically Black Colleges and Universities Give Graduates a Wage Boost

Article by Gregory Pine. Gregory Pine is Professor of Economics at University of New Orleans.

In 2010, two economists claimed that graduates of Historically Black Colleges and Universities, or HBCUs, suffer a “wage penalty” – that is, they earn relatively less than they would had they gone to a non-HBCU.

In an early draft of the paper, the economists – one from Harvard and the other from MIT – argued that while HBCUs may have served a useful purpose back in the 1970s, they were now, by some measures, serving to “retard black progress.” The reason why, they suggested, is that traditionally white institutions may have gotten better at educating Black students and that there might be value in “cross-racial connections” when it came time to get a job.

The paper, which relied on data from the 1950s through the early 2000s, generated negative headlines for HBCUs. For instance, The Wall Street Journal called HBCUs “academically inferior.” The New York Times warned readers about the “declining payoff from black colleges.”

As a scholar who has researched HBCUs, my colleagues and I have found contrary evidence: Students who went to HBCUs do not suffer a relative wage penalty. In fact, we found that they typically and on average earn more than similar students who went to non-HBCUs. Our findings are based on comparing HBCUs to other schools with a sizable Black student population.

Producers of black doctors, engineers

Largely established to serve Black people after the Civil War and in the Jim Crow era of racial segregation, HBCUs were the only higher education option for many Black Americans up through the mid-1960s during the push for integration. Since then, HBCUs have served a declining share of Black students. For instance, HBCUs served 17.3 percent of Black college students in 1980, but by 2015 the figure had fallen to 8.5 percent.

HBCUs have been in a constant struggle for their financial survival because of declining enrollment, among other things. In fact, some college finance experts predict that many HBCUs will disappear in the next 20 years.

HBCUs currently serve about 298,000 students and rank among the highest producers of black doctors. HBCUs also play an outsized role in the production of Black graduates in science, technology, engineering and mathematics, or STEM.

A wage premium

Our study included 1,364 nonprofit colleges and universities, both public and private, that award at least a baccalaureate degree.

Increased wages were strongest for the elite HBCUs: Hampton, Howard, Morehouse, Spelman and Xavier. But the effect persisted 10 years after graduation for graduates of all 59 HBCUs – more than half of the 100 or so HBCUs in the nation – that were included in the sample. Other HBCUs were not included because of lack of data.

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Source: Black Press USA