Introduction
Education, for a long time, has been viewed as one of the most important factors influencing economic success in the United States. Higher levels of education are correlated with higher salaries, better job opportunities, financial security, and overall long-term wealth accumulation. In this project, we argue that educational attainment is correlated with greater financial affluence over an individual’s lifetime. More specifically, individuals who achieve higher levels of education tend to earn more, have more assets, and be more financially secure compared to those with lower levels of education.
Research supports this argument by showing that wealth gaps between college-educated and non-college-educated households have widened over time, largely due to differences in asset ownership and investment opportunities
Bartscher et al. [5]
To support this argument, we utilized data from the Federal Reserve’s Distributional Financial Accounts (DFA) [1], which provides detailed information on how financial assets and wealth are distributed across 4 household groups in the United States: Those with no High School education, those with a High School education, those with some college education, and those with a Bachelor’s degree or higher. The dataset includes measures such as total assets, financial assets, real estate, liabilities, and net worth, and covers the periods from 1990 to 2024 by quarter, which allows for an analysis of long term trends over the span of more than three decades. This makes the dataset especially relevant to our argument, as it shows how higher educational attainment is consistently associated with holding a larger share of assets and net worth, helping demonstrate the strong relationship between education and financial affluence in the United States.
By combining insights from scholarly literature with three decades of national wealth data, this project analyzes how educational attainment is associated with financial affluence over time and considers how economic shocks such as the Great Recession and COVID-19 may shape these patterns of inequality in the United States.
We combine insights from our visualization with our literature review to answer our two main research questions:
- How does the distribution of financial outcomes across education levels in the United States correlate with patterns of economic and social inequality?
- If ever, when do we see the wealth gap by education widen the most? Are there significant historical events that coincide with these changes?
Literature Review
Overview
From our gathered sources, the general consensus among the authors is that education generally has a correlation with higher financial affluence in life. However, these authors emphasize that the degrees themselves are not the sole determinant of this financial affluence and that the assets that educated individuals consume are a strong indication of wealth. The literature in general indicates that the wealth gap between college-educated individuals and non-college-educated individuals has widened over time and is highly correlated to portfolio composition of stocks and other assets such as real estate [5][16]. Additional studies in the selected literature emphasize that macroeconomic crises can also have a large impact on the wealth gap by educational attainment. The Great Recession and COVID-19 were two large events that resulted in disproportionate losses for individuals with less education [18][21].
Discrepancies
Contradictions in the literature surround whether higher education actually causes higher wealth, and not just correlated with this idea. It could be argued that educational attainment and the future wealth associated with it are a result of preexisting familial financial status or other structural barriers from the past, thus meaning that education persists income inequality, rather than erasing it [11][17][9].
Commonalities
Across the literature, scholars generally agree that wealth inequality by education is not merely the product of individual effort but a reflection of historically contingent and structural implications. Education level interacts with factors such as asset ownership, financial knowledge, and intergenerational wealth transfers in ways that compound over time, creating cumulative advantages for certain households and persistent constraints for others [14][17][16].
Beyond access alone, successful completion of higher education and the ability to convert credentials into appreciating assets form a reinforcing cycle, particularly for those who already possess family wealth or financial buffers. Researchers also emphasize that economic crises such as the Great Recession and COVID-19 amplify existing inequalities, disproportionately harming lower-income households and marginalized groups [21][17].
Further Research
Important questions remain regarding how the macroeconomic environment interacts with local economic conditions to influence education-based wealth disparities. In particular, further research is needed to understand how asset price fluctuations, monetary policy, housing markets, and tax regimes redistribute wealth differently across education groups [12][16]. Additionally, most studies treat educational attainment as a categorical measure, such as whether a bachelor’s degree was obtained, without fully accounting for variation in degree quality, field of study, or alignment with labor market demands [16][19]. Incorporating these distinctions may provide a more precise understanding of how education translates into wealth accumulation. Finally, geographic variation remains unexplored. Regional labor markets, local housing conditions, and overarching policies may significantly influence the value of a degree and how directly that corresponds to financial success and long-term asset growth.
Significance
In this project, we analyzed the relationship between educational attainment and financial affluence to determine how much having a higher level of education influences one’s financial position. We analyzed the dataset Distributional Financial Accounts (DFA) from 1990 to 2024 [1]. This helps us to explore how financial equity, such as assets and net worth scale with different education levels. This project provides a different perspective from the traditional “income” narrative. Rather than focusing mainly on short-term earnings or income, we focus on asset ownership and accumulation of wealth, which provides a more concrete measure of financial security over time and mobility across generations. Our project focuses on the relationship between wealth and education because we want to find out how and when the wealth gap between all education levels observed widens most significantly, especially when experiencing economic shifts such as asset booms or recessions, so that we can help others understand how education drives and reinforces social inequality and economic patterns. This project connects to a larger question regarding the “American Dream,” whether education still acts as a bridge that reduces the wealth disparity or if it has become an obstacle that prevents one from succeeding financially. By analyzing moments in history where this gap expands, we can better understand how financial systems and access to investment opportunities unequally benefit those with higher educational attainment. Our work will answer questions about mobility, opportunity, and whether education depends on inequality or stabilizes it.
Analysis
To examine how educational attainment relates to financial outcomes in the United States, we analyze patterns in wealth distribution, asset composition, borrowing behavior, and geographic inequality using data from the Federal Reserve’s Distributional Financial Accounts (DFA) [1] between 1990 and 2024. Together, these patterns provide insight into how wealth accumulation differs across education groups and how those differences have evolved over time.
Figure 1: Net Worth Distribution by Education Level (2024).
One clear example of the financial disparity can be seen in the distribution of total household net worth. The bar chart shows that households with a bachelor’s degree or higher hold approximately 75% of total U.S. household net worth, while households with some college hold about 14.4%, those with a high school diploma hold 9.2%, and households without a high school diploma hold only 1.4%. This distribution highlights the substantial concentration of wealth among college-educated households, suggesting that higher education functions as a major dividing line in wealth accumulation. The concentration indicates that access to and completion of higher education may significantly influence long-term financial outcomes, such as economic security and asset growth.
The graph also supports the secondary article written by Alina K. Bartscher, Moritz Kuhn, and Moritz Schularick titled “The College Wealth Divide: Education and inequality in America, 1956-2016”, who argue that the divergence in wealth gap between college educated and non college educated households is mainly linked to portfolio composition [5][16]. In general, households with a college education tend to hold more shares in businesses through investments, allowing them to take advantage of another stream of income, and thus raising their net worth over time. These preliminary findings also raise some important questions. For example, does the disparity stem primarily from income differences, differences in savings behavior, barriers that limit asset accumulation among less educated households, or other factors? In addition, does this distribution suggest that expanding access to higher education would meaningfully reduce wealth inequality?
Figure 2: Financial and Non-Financial Assets Across Education Levels Over Time.
To better understand what may drive these differences in net worth, it is helpful to examine how different types of assets vary across education levels. From the chart, we observe that individuals who did not complete high school have the lowest measures of average financial assets and non-financial assets. Financial and non-financial assets have a positive relationship with education, meaning that asset levels increase as education increases.
We can also see that across all education levels, average non-financial assets have remained relatively constant over time with respect to each education level. However, in the college educated group, average financial assets have increased over time, while financial assets for the other education groups have decreased or remained relatively constant. These observations provide qualitative insight into asset patterns over time with respect to education levels, but should still be supported by additional sources for a more complete understanding of these relationships.
Figure 3: Assets vs. Liabilities for Households Without a High School Diploma.
While the previous chart compares asset ownership across education groups, it is also useful to examine the financial positive of the most vulnerable education category in greater detail. This chart shows the growing financial weakness of the non-high school graduates in the United States. In the 1990s, the group’s share of national assets was significantly higher than its share of liabilities, implying a small but positive position. However, by the mid-2000s, their share of assets dropped significantly while their liabilities remained relatively stable. This suggests that the modern economy is not simply about lacking wealth for those who have no degree, but also about the high risk of being trapped in debt, where households may owe a larger share of liabilities than the assets they possess. As a result, individuals without a high school diploma may face greater financial vulnerability and fewer opportunities to accumulate wealth over time.
Figure 4: Real Estate Wealth Share by Education Level (1990–2024).
Another important component of wealth accumulation in the United States is real estate ownership, which also shows clear differences across education groups. In the context of our project, this visualization provides a detailed side-by-side comparison of how the proportions of real estate wealth changed over time in the United States. The stacked area chart highlights how college-educated households have steadily increased their share of real estate since 1990, hovering right around 60% in 2024. Households with some college education have had a relatively stable share of real estate, right around 20%. Finally, those with only a high school education or no high school education have seen a slow but steady decline of their real estate ownership shares, with no high school education reaching as low as around 3% in 2024.
Therefore, the data visualization could illustrate a correlation between wealth and educational levels, as higher levels of real estate ownership are often correlated with wealthier individuals. The visualization highlights a clear wealth gap by education, with college-educated individuals being the most advantageous group, and how that gap has continued to grow over time. These trends in the data suggest a dynamically changing wealth distribution by education level in the United States, which motivates closer analysis of how these patterns will persist in the future.
Figure 5: Changes in Wealth Share Before and After the Great Recession.
Beyond long-term trends, we are interested in exploring how major economic events influence wealth inequality. Due to the availability of recent data, we focus on the Great Recession period from 2007 to 2010. The chart reveals a clear shift in the distribution of aggregate wealth across education groups from 2007 to 2010 to 2024 (most recent year available). Households with college degrees hold an increasingly large share of total U.S. wealth over time, while households with lower educational attainment account for a shrinking proportion.
The differences in column heights become more pronounced by 2024, visually signalling an increasing concentration of wealth among higher-educated households. While the Great Recession marks a key midpoint in comparison, the most notable pattern is the sustained upward shift in the wealth share of college-educated households, suggesting that the wealth concentration by education level persisted beyond the immediate effects of the recession. In relation to our research question, this indicates that changes surrounding short-term economic disruptions like the Great Recession did not reverse the longer-term concentration of wealth by education. This pattern supports our project focus on how wealth distribution across education levels has shifted over time and raises further questions about whether this trend began prior to 2007 or changed during specific periods between 1990 and 2024.
Figure 6: Borrowing and Saving Patterns Across Education Levels.
Another way to understand financial differences between education groups is by examining borrowing and saving patterns. College-educated individuals tend to earn higher incomes over time, so it makes sense that they hold significantly greater savings compared to the other groups. It also makes sense that college-educated individuals borrow more than the other education groups.
Individuals who hold a larger amount of financial assets tend to borrow money in order to allow for their investments to continue growing rather than liquidating assets. The relative decline or consistency in the other groups aligns historically, supporting the idea that individuals in lower financial brackets often find it more difficult to move financially upwards over time. While charts and plots provide a strong numerical representation of financial trends, a more complete understanding of these patterns would require additional sources of information.
Figure 7: Geographic Distribution of Household Income and Top Universities.
Finally, geographic patterns also provide insight into how education and economic opportunity may be related. This map was created in Tableau using two detailed data sources, each with its own dedicated layer. Median household income by county data were obtained from the United States Census Bureau’s American Community Survey (ACS) 5-Year Estimates, while the Top 50 national university data was obtained from U.S. News’ Best National Universities Rankings [2][3].
The map potentially reveals patterns in socioeconomic disparities by overlaying median household income with the top 50-ranked national universities. The map highlights a clear spatial correlation as the red dots representing the top 50 national universities can be observed to be greatly clustered within the dark green regions on the map representing counties with a high median household income. Another spatial pattern that is clearly displayed is that these higher-income regions and prestigious universities are heavily concentrated in coastal areas of the United States, with far fewer located in the Midwest or interior regions.
This suggests that proximity to higher education and economic opportunity may be unevenly distributed across regions, potentially reinforcing existing inequalities. Individuals living farther from major educational and economic centers may face additional barriers to accessing higher-paying jobs or prestigious universities, which may contribute to stagnating or widening wealth gaps based on educational attainment.
Concluding Argument
As a reminder these were the two research question we scoped our narrative’s analysis around:
- How does the distribution of financial outcomes across education levels in the United States correlate with patterns of economic and social inequality?
- If ever, when do we see the wealth gap by education widen the most? Are there significant historical events that coincide with these changes?
Our visualizations and the literature together suggest that financial outcomes in the United States are strongly stratified by educational attainment. Households with a bachelor’s degree or higher consistently hold a significantly larger share of assets, real estate, and overall net worth compared to those with lower levels of education, reinforcing broader patterns of economic inequality. The data also indicates that the wealth gap widened most noticeably during major economic disruptions, particularly the Great Recession (2007–2009) and the period following COVID-19, when college-educated households increased their share of total wealth while lower-education groups experienced relative declines. These trends suggest that higher-educated households are more likely to benefit from asset ownership and diversified investments that recover more quickly after economic shocks. However, the literature emphasizes that education alone does not fully explain wealth disparities, as structural factors such as intergenerational wealth, access to financial markets, and geographic opportunity also influence how education translates into long-term financial success [14][9]. Overall, while higher education is strongly associated with greater financial affluence, the widening wealth gap across education groups reflects broader structural inequalities that shape economic mobility over time.