Stratification economics and racial disparities in U.S. K−12 education

Abstract

This manuscript introduces and applies the framework of stratification economics to understand persistent educational disparities between Black and White American K-12 students. Stratification economics challenges traditional economic theories that attribute inequality primarily to individual choices and cultural factors, instead highlighting the structural, institutional, and deliberate mechanisms perpetuating racial and socioeconomic hierarchies. Drawing from interdisciplinary literature, the paper argues that U.S. educational inequality stems from systemic resource advantages favoring White Americans, evident in disparities in school quality, enrichment access, and college admissions support. The paper identifies intergenerational resource transfers as critical drivers of educational inequality, where wealthier families can consistently provide advantages to their children, thus perpetuating a cycle of privilege. Furthermore, it explores how dominant groups maintain their privileged positions through active resistance to integrative policies, affirmative action, and curricular inclusivity. Empirical evidence demonstrates that even when Black American students acquire significant human capital, systemic discrimination still hinders their economic mobility and limits their academic opportunities, particularly within STEM fields. The manuscript also addresses stereotypes and biases affecting Black American students and their families, underscoring how individual behaviors unfairly shape perceptions of entire communities. It emphasizes the importance of racially explicit public policies that directly correspond to the theoretical assumptions of stratification economics, illustrating how each policy maps onto structural mechanisms of inequality. Ultimately, the paper calls for education stakeholders to adopt stratification economics as a framework for understanding and addressing educational disparities. It advocates for policy solutions grounded in stratification economics to dismantle entrenched racial hierarchies and ensure equitable educational outcomes.

Stratification economics and racial disparities in U.S. K−12 education

This paper employs stratification economics both as a diagnostic tool to examine racialized educational disparities and as a framework to inform evidence-based, race-conscious policy recommendations. The theory of stratification economics emerged as a response to the limitations of traditional economic theories to explain the persistence of intergroup inequalities (Lewis et al., 2021). Based on the premise that economic disparities cannot be reduced to individual deficiencies or cultural dysfunctions, stratification economics focuses on the structural, institutional, and intentional processes which maintain and reinforce hierarchies between social groups. It challenges neoclassical approaches which assume that market forces will naturally dissolve inequalities over time. Instead, it highlights how dominant groups maintain social and economic advantages through intergenerational transfers of resources and marginalization mechanisms.

The concept of stratification economics emphasizes the importance of understanding how dominant groups actively shape and reinforce their privileged positions by framing inequality as the result of group-based agency and intergroup conflict. It takes a step beyond individual-level analyses and human capital explanations to examine broader societal structures which perpetuate disparities. To guide the reader through this analysis, we start by defining stratification economics and contrasting it with traditional economic theories. Next, we explore five foundational assumptions of this framework, each substantiated by empirical evidence and applied to the context of K−12 education in the United States. The five foundational assumptions of stratification economics form the analytical backbone of this paper. Each assumption is applied to the U.S. K−12 education system and linked to real-world disparities. Later sections explore how policies—especially those adopted in California—can be aligned with each assumption to dismantle structural inequality.

Stratification economics is named after the sociological concept of “social stratification.” There is a long tradition of sociology which considers intergroup differences to be the result of group contestations beyond contests at the individual level. According to Stewart and Coleman (2005), the term racial stratification refers to the process by which race is used as a criterion for assigning roles and positions in organizations and institutions. The principle of stratification economics differs from the conventional neoclassical approach which emphasizes choice and human capital as explanations for the disparities which exist between individuals and groups based on their identities. As stratification economics goes beyond individual optimization, it fuses insight from multiple social sciences to examine stigma, existing structures, and collective group and political actions.

The intellectual lineage of stratification economics includes a wide range of influences, from early contributions by Dubois (1906) to the critical examination of economic inequality through sociological frameworks of social stratification, pioneered by scholars like Parsons (1949), originally published in 1937. In this interdisciplinary approach, which draws on sociology, psychology, political science, and law, the role of group identity is emphasized in order to understand economic outcomes. A number of economists, such as Darity, Chelwa, Hamilton and Stewart, have expanded this perspective by investigating how racial, ethnic, gender, and class factors interact in perpetuating inequality (Chelwa et al., 2022; Darity, 2005, 2009).

Economists should pay attention to stratification economics of education because it offers a more complete and realistic explanation for persistent intergroup inequalities which traditional models cannot explain. Although neoclassical economics assumes that market forces will naturally eliminate educational disparities, stratification economics has demonstrated that systemic factors, such as institutional discrimination, intergenerational wealth transfers, and group-based power dynamics, play an important role in maintaining inequality. Using this approach, economists can better understand the causes and effects of disparities by focusing on how dominant groups preserve their advantages. Furthermore, stratification economics of education provides valuable insights into designing more effective educational policies which target the root causes of inequality, rather than simply addressing individual student behavior.

This economic literature review provides a case for stratification economics of education by focusing on current and historical educational policies in the U.S. between Black American and White American school children. Stratification economics “examines the structural and intentional processes generating hierarchy and, correspondingly, income and wealth inequality between ascriptively distinguished groups” (Darity, 2005, p. 1). Darity contends that privileged groups—those at the top of the hierarchy—are exempt from taking responsibility for systemic oppression which they benefit from and perpetuate. Correspondingly, researchers and society at large defend systems of oppression via evidence and arguments in favor of cultural determinism which have replaced similar, archaic evidence and arguments of biological determinism (Darity, 2005). It is guided by these assumptions:

• Disparities in groups' abilities to transfer resources across generations are key drivers of inequality.

• Dominant groups have material interests in actively maintaining their privileged positions.

• The acquisition of human capital does not guarantee that members of an underprivileged group will not experience the economic penalties that stem from discrimination.

• Dysfunctional behavior by some individuals is not reflective of a collective characteristic of a broader group.

• Effective public policy is essential to push against discrimination and foster more equitable outcomes.

See Figure 1 for key explanations and citations for each assumption which are further described in the paper.

Figure 1

Intergroup disparities can apply to any group on the basis of social constructs like dis/ability, ethnicity, gender, race, etc. This essay focuses on intergroup wealth disparities between Black American and White American schoolchildren because American society systematically privileges White American persons over Black American persons creating generational, intergroup wealth disparities between these groups (Darity, 2005).

While Black American students are disproportionately impacted by poverty and systemic disinvestment, it is crucial to avoid equating race with class. Not all White Americans are affluent, and not all Black Americans face economic hardship. Yet, racial disparities persist even among individuals from similar socioeconomic backgrounds. For example, Black middle-class families are more likely to experience downward mobility compared to their White counterparts (Shapiro et al., 2013), and Black students from high-income families encounter levels of school discipline, tracking, and teacher bias similar to or greater than those faced by low-income Black students (Carter and Welner, 2013; Skiba et al., 2011). This highlights the need to examine race and class as intersecting, rather than interchangeable, dimensions. The ongoing presence of racial disparities across socioeconomic levels reflects the structural and institutional nature of racism in education. A comprehensive stratification economics approach must address this complexity to avoid perpetuating oversimplified narratives.

The Black–White disparity is especially significant in the U.S. due to its deep historical and structural roots in slavery, Jim Crow segregation, redlining, and the enduring racial wealth gap. This binary remains a critical measure of the nation's progress—or lack thereof—in addressing systemic inequality. Scholars have noted that many civil rights advancements, initially aimed at combating anti-Black discrimination, have created a framework for broader equity across racial, gender, and class divides (Bell, 1980; Crenshaw, 1988). Therefore, examining and addressing Black–White disparities in education is not only crucial for achieving justice and equity within the Black community but also vital for understanding how racial hierarchies function across U.S. institutions. It serves as a foundational starting point for crafting public policies that dismantle structural racism and produce far-reaching benefits for other marginalized groups.

We sought to answer two research questions: (1) Does stratification economics apply to educational institutions in the U.S.? (2) Does stratification economics apply to Black American and White American educational disparities? The five assumptions which Darity constructed as part of the stratification of economics framework are applied to education and discussed in further detail in the following sections.

Disparities in groups' abilities to transfer resources across generations are key drivers of inequality

The first and most fundamental assumption in stratification economics is that persistent inequality stems from disparities in intergenerational wealth transfers between groups. This section explores how unequal educational opportunities arise from accumulated advantages and later examines policy strategies aimed at breaking this cycle. This assumption argues that property dispossession (Munshi, 2021), exclusionary social policies (Simson, 2014), and opportunity gaps (Gregory et al., 2010), for example, all affect a group's ability to transfer resources from generation to generation, resulting in wealth inequality. This long-term, cyclical process results in disparities continuing throughout the generations via resource accumulation and transfer (Darity, 2005). This intergenerational transmission secures privilege to future generations to the exclusion of others regardless of individual capacity (Pfeffer and Killewald, 2017).

In addition to providing better education, healthcare, and financial support for future generations, families with greater resources also contribute to a cycle of privilege (Leonardo, 2009). In contrast, families with limited resources may face difficulty providing the same level of support, perpetuating a cycle of generational disadvantage. The wealthier the family, the greater the opportunity to provide their children with higher quality education, including private tutoring, extracurricular activities, and access to prestigious schools (Braga et al., 2017). In the long run, this educational advantage can result in better career opportunities and higher earnings for the individual (Pfeffer and Killewald, 2017). Providing similar educational advantages to their children may be difficult for families with limited resources, perpetuating disparities in income and human capital (Leonardo, 2009). However, the benefits of wealth transfer are not as high for Black American children who are both less likely to have wealthy parents and less likely to be upwardly mobile in household wealth (Pfeffer and Killewald, 2019).

There are plenty of examples of this cyclical process in America's education system. Recent studies show that SAT performance correlates strongly with parental wealth: over one-third of students from the top 1% score above 1,300, compared to < 5% from middle-income families (Chetty et al., 2023; Geiser, 2015). Additional opportunity gaps can be created when there is a financial cost to taking the test or expenses involved in providing academic support (e.g., test prep courses) (Braga et al., 2017). In more affluent families, parents spend more money on “training” their children to take the test, which typically involves developing skills unrelated to their high school education. Wealthy students have more access to advanced placement courses and dual enrollment opportunities—which are both predictors for college-going rates (Klugman, 2013; Xu et al., 2021). The dual enrollment program has been proven to increase postsecondary attainment, reduce time to degree, and improve academic performance for students (Allen and Dadgar, 2012).

It is common for wealthy students to have access to professional college counselors, who can offer a significant advantage during the admissions process. However, racial disparities persist regardless of class. As an example, White American students, regardless of their financial circumstances, are more likely to have access to private college counselors, giving them a significant edge in the admissions process (Braga et al., 2017). In contrast, many Black American students rely on overburdened high school counselors, as severe staffing shortages are common. In most states, counselor-to-student ratios far exceed the American School Counselor Association's recommended ratio of 250:1; only Vermont (186:1) and New Hampshire (208:1) meet or surpass this standard (Gagnon and Mattingly, 2016). These structural inequities restrict access to essential guidance and support for low-income and racially minoritized students, hindering their ability to pursue postsecondary education. High school counselors can serve as a form of social capital for low-income students and may provide access to postsecondary education opportunities which might otherwise be unattainable to low socioeconomic students (Oleka and Mitchell, 2022). Exclusionary social policies include a lack of access to gifted education for Black Americans with White Americans and East Asian Americans being overrepresented in gifted education, and Black Americans being overrepresented in special education (Annamma et al., 2013). Research shows that Black and Brown students with disabilities experienced racism-based perceptions of intelligence, productivity, and academic ability and are pathologized as lazy or deviant, which reduces or erases their access needs (Mireles, 2022). The possibility of a student receiving gifted services is more than six times greater for students from families whose socioeconomic status is in the top 20% than for students from families whose socioeconomic status is in the bottom 20% (Grissom et al., 2019). Gifted education improves an individual's higher educational attainment, labor market gains, and human capital more generally (Lavy and Goldstein, 2022).

In light of the recent COVID-19 pandemic, it is worth noting that White Americans were more prepared to withstand a pandemic by, for example, having access to more technology and academic support than poorer students (Friedman et al., 2021). From 2020 to 2021, nearly 55% of digitally disconnected (without access to the internet or email) students lived in Black American, Latin^* American, and American Indian households in the U.S., despite making up only 40% of the general student population. Furthermore, 50% of digitally disconnected students come from families that earn < $50,000 per year. Those without digital skills may find it difficult to obtain higher-paying jobs (IEEE, 2024).

White Americans can also afford more access to academic tutors and sports lessons (Braga et al., 2017). Participation in extracurricular sports is heavily influenced by income, as wealthier families allocate substantially more resources to youth athletics (PPAI, 2022). Food insecurity, which disproportionately affects low-income and racially minoritized students, negatively impacts both academic performance and overall wellbeing (Au et al., 2019; Delva et al., 2007).

Black American students attend schools with higher teacher and principal turnover, fewer resources overall, and less funding (Carver-Thomas and Darling-Hammond, 2017; Morgan and Amerikaner, 2018). They also learn from teachers with lesser degrees and credentials (Jackson, 2009) which is problematic because the years of experience and quality of training a teacher has been positively correlated with the academic achievement of children (Gimbert et al., 2007). A worldwide study found that students who attend schools whose principals report a greater shortage of teacher and support staff perform worse in reading than their peers. The performance of students in schools with a greater number of staff shortages was even lower (OECD, 2020).

Increasingly, White American students are attending private schools. In the U.S., nearly two-thirds of the students in private school are White American (Downs, 2021). There is evidence that private school students earn 13.1% more than those who attend public schools. Approximately 97% of graduates from private schools enroll in some form of higher education compared with approximately 82% of graduates from public schools (Owyang and Vermann, 2012). In consequence to white flight, political stakeholders—who are more likely to be White and wealthy—are less incentivized to adequately or equitably fund public schools (Li, 2009). In some cases, private schools and some charter schools are more segregated than public schools (Garcia, 2008; Li, 2009).

Addressing these disparities through the framework of stratification economics calls for policy interventions that tackle systemic inequities in resource access. In California, the Local Control Funding Formula (LCFF) aims to reduce wealth-based educational disparities by directing additional funding to districts with high concentrations of disadvantaged students. Similarly, initiatives to provide universal school meals and close the digital divide highlight the understanding that educational outcomes are influenced by structural factors beyond individual effort. These need-based and racially explicit programs demonstrate how targeted public investment can help mitigate intergenerational disadvantage.

There are also key features beyond funding and school personnel training that distinguish White American schools from Black American schools. For example, 14 million students—mostly racially minoritized students—attended schools with cops but no support staff like counselors, social workers, psychologists, or nurses because schools spent their limited state aid on staff sworn police officers and school resource officers (Mann et al., 2019). Generally, Black American students are more likely to go to schools with metal detectors, searches, and drug-sniffing dogs. Adults often unconsciously view Black American boys in ways that reflect anti-Black, racist stereotypes of Black boyhood and manhood, which originated during chattel slavery and lead to Black dehumanization (Warren et al., 2022). According to Coles and Powell (2020), racial disparities in school discipline are rooted in the micro-level context of systemic societal exclusion of Black Americans. For example, Black American schoolchildren endure a heightened criminalization which results in disproportionally high suspensions, longer suspensions, repeated suspensions, and expulsions for less serious infractions (Chin et al., 2020; Simson, 2014). Suspensions are one of the greatest predictors of contact with the criminal justice system (Rosenbaum, 2020). School discipline like the prison industrial complex costs society a lot of money. To illustrate, Rumberger and Losen (2017) found that the “negative impact of suspension on graduation rates in California translates into a statewide economic burden of $2.7 billion dollars in lifetime costs from just one graduating class” (p. 4). School discipline—better conceptualized as the school to prison nexus—is not only costly to students, but to society as well. A reduction in stereotype-driven bias is an essential step toward equity; however, addressing the entrenched racial bias in the criminal justice system requires a broader systemic overhaul (Agan, 2024).

Dominant groups have material interests in actively maintaining their privileged positions

This section examines the second core assumption of stratification economics: that dominant groups are motivated by material and symbolic incentives to maintain their advantages. These incentives drive resistance to integrative educational policies, even when such policies offer collective social benefits. In the U.S. educational system, there are substantive benefits associated with being White American (Leonardo, 2009). White American persons have a vested interest in maintaining their own privilege and substantive benefits. For example, historical resistance to busing, such as in cities like San Francisco, demonstrates how White and affluent families have circumvented desegregation policies by enrolling in private schools or exploiting district loopholes (Rubin, 1972; O'Connell, 2021). Maintaining their own privilege is not for the greater good, research shows that integration benefits all students academically (Wells et al., 2016) and cross-culturally (Garda, 2011).

White Americans frequently oppose affirmative action policies in higher education, even as they disproportionately benefit from legacy admissions and other unearned advantages (Hall, 2016; Lamb, 1992). Critics of affirmative action often highlight the lower GPAs or higher dropout rates of some minoritized students admitted through these programs. However, research indicates that these students experience significant long-term benefits, including higher graduation rates and increased earnings compared to similar students not admitted under such policies, underscoring the lasting value of affirmative action initiatives (Holzer, 2007).

Efforts to restrict critical race theory, ban DEI programs, and censor curricula on racial equity are part of a coordinated strategy by dominant groups to maintain cultural and institutional control (Morgan, 2022; Russell-Brown, 2022). Measures like Florida's “Stop WOKE Act” and national campaigns by organizations such as Parents Defending Education represent a growing backlash against racially explicit educational reforms. From the perspective of stratification economics, this resistance is driven by the material and symbolic interests of dominant groups in upholding racial hierarchies, even at the expense of educational freedom and constitutional rights (Shearer, 2022).

Moreover, privilege is intricately woven into the educational context, in which dominant groups often oppose initiatives that seek to eliminate systemic disparities (Leonardo, 2009). As an example, White American persons are persistently opposed to the implementation of inclusive and diverse curricula that acknowledge the contributions and perspectives of historically marginalized groups (Forbes, 2023). Culturally responsive education and the incorporation of diverse voices into the curriculum are met with resistance, as some see these changes as threatening existing privileged narratives. It is important that teachers understand and appreciate their students' diverse cultural, economic, and geographic circumstances in order to serve them better. To accomplish this, teachers should support students and families in sharing their perspectives rather than assuming their needs and blaming them when issues arise (Gay, 2018; Jacobson, 2020). A lack of diversity in education not only limits the educational experiences of students from diverse backgrounds, but also protects the dominant group's exclusive control over historical and cultural narratives (Villegas, 2008).

This phenomenon reflects W.E.B. DuBois' concept of the “wages of whiteness,” where White Americans—especially those from economically disadvantaged backgrounds—gain psychological and symbolic value from their racial identity, even when it conflicts with their material wellbeing (DuBois, 1935). Historically, poor and working-class White Americans have supported policies that uphold racial hierarchies, despite these policies offering little tangible benefit to them and often worsening inequality overall. Recent studies reveal that many White women and economically marginalized White Americans back anti-DEI initiatives, curriculum restrictions, or opposition to affirmative action, even when these measures diminish their own professional opportunities or the educational prospects of their children (Tesler, 2016; Frankenberg and Orfield, 2012).

From the perspective of stratification economics, policy efforts must anticipate and counter resistance to equity. Redistributive measures—such as equitable funding formulas, inclusive curriculum requirements, and transparency mandates—challenge entrenched interests and demand political commitment. For instance, California's Ethnic Studies curriculum and Assembly Bill 2635, which seeks targeted funding for Black American students, are examples of policy initiatives aimed at addressing the institutional pushback against equity efforts.

Furthermore, disparities in school funding persist, with affluent communities having greater resources available to support their schools through property taxes (Owens, 2018). White American parents are also more likely to leverage their private capital to fundraise and enact positive change in their children's public schools. Taken together, wealthier, predominantly White American districts have a greater economic advantage, which translates into better facilities, more experienced teachers, and a wider range of educational opportunities (Weathers and Sosina, 2022). In an attempt to correct this imbalance, such as through the implementation of redistributive funding policies, there is often opposition from those who fear the loss of their own educational advantages. As a result, the resistance to equitable educational policies, both in terms of content and funding, serves to perpetuate the privileges of certain groups while hindering the broader objective of creating a system that is inclusive and equitable for all students (Ansell, 2010). As stratification economics emphasizes, these behaviors are not incidental—they reflect dominant groups' vested interest in preserving educational and economic privilege.

The acquisition of human capital does not guarantee that members of an underprivileged group will not experience the economic penalties that stem from discrimination

This section examines the third core assumption of stratification economics: that acquiring human capital alone cannot counteract the systemic penalties of racial stratification. The inability of education to level the playing field is not a flaw in the system but a structural outcome of institutionalized discrimination. This section explores this dynamic and considers the types of policy interventions needed to disrupt it. This assumption argues that there are economic penalties and premiums to belonging to certain groups (Darity, 2005). Regardless of human capital and educational attainment, marginalized and discriminated groups experience a decline in economic wellbeing (Assari, 2020). A recent study showed that improvements in the educational attainment of children from poor socioeconomic backgrounds did not improve their employment prospects (Salvanes, 2023). Even with comparable or higher levels of education, Black Americans continue to encounter systemic discrimination in key areas such as the labor market, housing, and access to credit, leading to reduced economic returns on their human capital (Leonardo, 2009; Assari, 2020). This ongoing disparity highlights that structural racism, rather than individual effort or educational achievement, remains a significant obstacle to economic mobility. Consequently, Black American persons with the same level of education do not have the same opportunities as White American persons (Leonardo, 2009). By means of social stratification, the U.S. social system places an overvaluation on the education of White Americans and an undervaluation on the education of Black Americans. A study of a nationally representative sample of American adults found that Black American students experienced fewer economic benefits after each additional year of schooling (Assari, 2020). These reduced benefits include lower income growth, diminished occupational status, and limited wealth-building opportunities.

A large gap exists in disciplinary action, grade-level retention, special education classification, gifted and talented program participation, and advanced placement coursework (Shores et al., 2020), and there is a striking consistency in the relationship between racial differences in family income, parent education, and these gaps. In the 2015–2016 school year, Black American students experienced significant disparities in educational outcomes compared to their White peers. According to Shores et al. (2020), Black American students were three times more likely to be suspended, three times more likely to be held back a grade, and only half as likely to be identified as gifted and talented or to enroll in Advanced Placement (AP) courses. These disparities remained even after accounting for socioeconomic status, underscoring that race—not just family-level human capital—has a substantial impact on educational opportunities and outcomes.

The fact that bias lowers grades and achievement scores for students of color over White Americans is problematic because grades and achievement tests are strong measures of positive life outcomes—like future income and job security—more so than pure intelligence tests (Borghans et al., 2016). Due to the substantial differences in educational experiences between students with lower socioeconomic status and those with higher socioeconomic status at high schools, it is not surprising that their pathways into STEM are different. Research shows that lower-socioeconomic-status students are less likely to major in STEM when they attend higher-resourced schools due to a lower level of access to those resources (Bottia et al., 2022). While STEM diversification efforts are often presented as inclusive, some scholars argue that they can unintentionally reinforce racial hierarchies in both education and the labor market. Morales-Doyle and Gutstein (2019) suggest that many STEM programs are designed to attract middle-class and White families to under-resourced schools, which can lead to gentrification and marginalize local Black and Latin^* communities. These initiatives often prioritize workforce preparation and technical skills over critical engagement with the political, ethical, or historical aspects of science and technology. As a result, racially minoritized students may be funneled into lower-paying, subordinate roles within the STEM workforce, while more privileged students gain access to advanced pathways that lead to innovation, leadership, or entrepreneurship. This dynamic reflects the logic of racial capitalism, where educational reforms are leveraged to create a racially stratified labor force that supports dominant economic systems (Robinson, 1983; Morales-Doyle and Gutstein, 2019). Instead of addressing inequality, such programs may simply repackage it under the guise of diversity.

Teacher biases and systemic structures in fields like STEM have created barriers that disproportionately exclude Black American students from high-growth career paths. Despite showing aptitude, these students encounter stereotypes, lower expectations, and tracking systems that limit their access to enrichment and advancement opportunities (Copur-Gencturk et al., 2020; Morales-Doyle and Gutstein, 2019).

It is still the case that Black American students with substantial academic achievement are discriminated against in the college admissions process, which hinders their ability to gain admission to higher education institutions that could enhance their economic prospects. It was found that Black American students with high academic achievement were being denied access to their priority University of California campuses—which are highly prestigious, public universities—and were cascaded down to the least selective campuses as a result of their racial background (Comeaux et al., 2020). Research shows that admissions counselors in predominantly White institutions are more inclined to consider Black American applicants who present themselves as deracialized and racially apolitical than those who demonstrate a commitment to antiracism and racial justice in their application (Thornhill, 2019).

In spite of the emphasis placed on academic achievement, Black American students face additional barriers in accessing extracurricular activities and resources which is consequential for later life outcomes and income (Meier et al., 2018). Many Black American students do not have the opportunity to participate in enrichment programs, clubs, and extracurricular activities that are crucial to the development of their skills and to the holistic development of their education. White American families can enroll their children in a variety of extracurricular activities, thereby providing them with an advantage when it comes to pursuing higher education and career opportunities. However, students from Black American families may be excluded from these enriching experiences, which will exacerbate the existing skill and network gaps (Knight-Diop, 2010). The lack of access to higher education not only limits the overall development of Black American students, but it also perpetuates the generational cycle of economic disadvantage as they are unable to compete on an equal footing with their more affluent peers (Serna and Woulfe, 2017). Disparities in extracurricular opportunities must be addressed in order to foster a more inclusive educational system and break the cycle of economic penalties associated with discrimination.

Addressing racial penalties in education requires policy interventions that extend beyond simply expanding access. Holistic college admissions, increased funding for enrichment programs targeting racially minoritized youth, and equity-focused teacher training are crucial steps. For instance, California's My Brother's Keeper initiative supports college preparation for underrepresented students, while North Carolina's revised gifted program standards promote multiple identification pathways to reduce bias. These policies are essential to ensure that human capital gains are not systematically undervalued.

Dysfunctional behavior by some individuals is not reflective of a collective characteristic of a broader group

Stratification economics highlights that inequality is perpetuated not just through material exclusion but also through group-based misrecognition. The fourth assumption suggests that the negative behavior of a few individuals is often generalized to their entire group, reinforcing stereotypes that justify discriminatory practices. There have been negative impacts on Black American families and communities as a result of the stereotyping of Black Americans over the course of U.S. history. Among other things, the belief that Black Americans are unintelligent, lazy, violent, and criminals has adversely affected educational outcomes, employment opportunities, socioeconomic status, and the dismantling of Black American communities and families (Taylor et al., 2019). In many cases, stereotypes perpetuated against Black American people result in oppression, which is directly related to poverty and a variety of other negative outcomes. For example, school personnel are more likely to rely on stereotypes and implicit biases when under duress which research suggests partially explains disparities in school discipline (Jarvis and Okonofua, 2020; Okonofua and Eberhardt, 2015).

It is common for school personnel to discipline Black American students in school at disproportionate rates, which negatively impacts their academic and economic prospects. In high school infractions, racially minoritized students receive harsher sentences than their white co-conspirators on both intensive and extensive margins (Liu et al., 2022). Racially minoritized students were 67% more likely to be suspended and suspended for 0.045 days longer on average than White American students who were involved in the same incident and had similar prior disciplinary histories (Bacher-Hicks et al., 2019; Shi and Zhu, 2022). Additionally, these results are not restricted to Black American students, but also to Latin^* American and other racially minoritized groups. The discipline of children of color has a disproportionate impact on academic failure and dropout rates as well as significant emotional and psychological distress for these children (Fadus et al., 2021).

A generalization about the academic potential of Black American students based on the performance of a few individuals should not be used when considering access to advanced placement and gifted programs. Based on the composition of gifted and talented students, there are significant discrepancies, with only 3.5% of Black American students enrolled in gifted education, as compared to 7.6% of White American students enrolled in gifted courses, which is more than 50% higher than that for Black American students (Johnson and Larwin, 2020). This populace's rights to life, liberty, and the pursuit of happiness are denied to them if we fail to educate them to their fullest potential. This denial does not come from any inherent flaw in these Black American schoolchildren but is solely a result of their being born Black in a racist system underscored by anti-Black bias. As a result of their births, each of these individuals has been inextricably linked to a society that has traditionally viewed Black Americans as social misfits and deviants. In the present education system, it is systematically racist to deprive the less advantaged of equal access to opportunities by conforming to stereotypes and unfounded beliefs. Misbehavior or academic struggles of a few Black American students should not be used to stigmatize the entire community. Stereotyping based on individual behavior can lead to unjust disciplinary measures, reinforcing negative perceptions and impeding the educational advancement of Black American students. Efforts should be made to dismantle biased assumptions and foster recognition that individual actions do not define the capabilities or potential of an entire community (Okonofua and Eberhardt, 2015).

The tendency to generalize dysfunctional behavior among some Black American students to the entire group is reinforced by media narratives, biased disciplinary records, and teacher perceptions influenced by systemic racism. This dynamic is part of what Okonofua and Eberhardt (2015) refer to as the “two strikes” phenomenon, where Black students, particularly boys, are more likely to face harsher discipline after repeated infractions due to the assumption of a persistent pattern of misbehavior. These perceptions contribute to stereotype-driven expectations in schools, where Black children are often seen as disruptive or less capable, regardless of individual circumstances (Warren et al., 2022). Additionally, the discipline of Black girls is disproportionately higher than that of White female peers and even boys of other racial groups. According to Delpit (2006), Black girls are frequently subjected to harsh discipline as a consequence of cultural misunderstandings, stereotyping, and deficit views held by educators, and as a consequence, they can be perceived as disrespectful or defiant when communicating their opinions. In contrast, other racially minoritized groups, such as Asian Americans, are often subjected to the model minority myth, which assumes that all members of the group are academically gifted and socially compliant. While seemingly positive, this stereotype creates pressure to conform, hides within-group disparities, and fosters competition between marginalized groups (Lee, 2009). These contrasting stereotypes reveal the broader racialization in education, where certain behaviors are unfairly pathologized while others are idealized, both of which obscure the individuality and diversity of students. The impact on pedagogy is significant, as educators may unconsciously lower expectations for some students while neglecting the unique needs of others. To break free from these binary frames, intentional training, culturally responsive teaching, and structural changes to school climate and assessment practices are essential.

It is important to point out that discussions regarding parental involvement in schools should not assume that all Black American parents are less engaged in their children's education. Certain Black American families are highly engaged, and effective policies should support and encourage parental involvement at all levels (Grice, 2020). Often, school personnel overlook the many ways in which Black American parents contribute to their children's education by relying on traditional definitions of parent involvement (Wilson, 2019). White American, middle-to-upper-class parents engage in these behaviors more readily as a result of flexible schedules, available capital, and schools that systematically marginalize parents of color (Love et al., 2021). Parents of color may be subjected to prejudice in schools as a result of these negative, deficit views, which may result in some teachers not expecting, welcoming, or cultivating relationships with Black American parents (Grice, 2020).

Policy solutions must address how group-level misrecognition contributes to inequity. Key interventions include reforming school discipline policies, conducting bias audits in college admissions, and incorporating cultural competency into teacher education. Initiatives such as California's Positive Behavioral Interventions and Supports and Holistic Admissions Guidance are designed to mitigate the penalties imposed by stereotype-driven decisions.

Effective public policy is essential to push against discrimination and foster more equitable outcomes

Stratification economics shows that inequities are maintained by structural factors rather than individual behavior. Public policy plays a critical role in either upholding existing hierarchies or breaking them down. Policies that promote equitable access to education, nutrition, and extracurricular activities directly address the intergenerational transfer of advantage highlighted in the framework. Historically, researchers (and society) argue that race-neutral policies could be used to address the issues of stratification of economics, but race-neutral policies come with mixed results (Myers and Ha, 2018). Race-neutral remedies are designed to provide assistance to minorities without causing harm to dominant groups. However, race-neutral policies fail more often than they succeed when analyzing their effectiveness. Moreover, race-neutral policies stall and, in some cases, impede the progress made by programs that are racially explicit (Flynn et al., 2017). This article supports a racially explicit approach. For example, empirical evidence indicates that government efforts to reduce racial income disparities, including anti-discrimination enforcement and minimum wage protections, have significantly narrowed the racial wealth gap, emphasizing the transformative potential of public policies that address structural racism's economic impact (Bahn and Sanchez Cumming, 2022).

In terms of education systems, California's public education system—which predominantly enrolls racially minoritized students—has several successful examples of effective public policy to combat discrimination and foster more equitable results. The Local Control Funding Formula (LCFF) in California allocates resources in accordance with student needs, providing additional funding to students in disadvantaged communities who are often racially minoritized, including English Language Learners, foster youth, homeless youth, and students who qualify for free or reduced lunch (CDE, 2023b). As part of the policy, local school districts have the flexibility to tailor solutions to their specific needs. Community involvement is mandated through the development of Local Control and Accountability Plans (LCAPs), ensuring that diverse perspectives are taken into consideration. In line with effective public policy principles that address historic inequities and foster an inclusive learning environment, the LCFF emphasizes transparency, accountability, and ongoing evaluation.

Another example of public policy that seeks to combat discrimination and promote a more equitable environment in nutrition and education is California Universal Meals (CDE, 2023a). A free meal program is provided to all students, regardless of their socioeconomic status, to address food insecurity and reduce stigma associated with receiving subsidized meals. This universal approach ensures that all students have access to nutritious meals, which in turn contributes to academic performance and the overall wellbeing of the students. In addition to demonstrating commitment to inclusivity and equal opportunity, it eliminates economic and racial barriers.

In 2021, California introduced a new law addressing school discipline (CDE, 2023c). According to the law, disproportionate disciplinary actions that adversely affect marginalized student groups must be addressed in order to foster a more equitable and inclusive learning environment for students. Effective public policy is reflected in the law's commitment to eliminating discriminatory practices and promoting equity by requiring schools to consider alternative, non-punitive measures before imposing suspensions or expulsions. As part of the legislation, schools are required to collect and report data on disciplinary actions, enabling the identification and correction of disparities among student populations, which is aligned with accountability and transparency principles. Several other effective public policies exist to combat discrimination and promote more equitable outcomes, including transitional kindergarten, the California Dream Act, and other grant programs in the state.

Additionally, California has adopted progressive measures to address the digital divide and promote equitable access to educational resources. As a result of the state's recognition of the impact of technology on modern education, it has taken measures to ensure that all students, regardless of their socioeconomic status, have access to the necessary tools for online learning. The California Digital Divide Innovation Challenge Fund, for example, allocates resources to bridge the digital divide by providing funding for internet connectivity, devices, and digital literacy training in underserved areas (CDE, 2024). This public policy not only acknowledges the disparities in technological access but actively works toward creating a level playing field, recognizing that access to digital resources is essential to participate fully in the educational process. California's public policies are aimed at creating an inclusive and equitable educational landscape that prepares all students for success in the digital age, regardless of their background or economic standing. At the federal level, Harlem children's zone (Dobbie and Fryer, 2011), Moving to Opportunity (Chetty et al., 2016), Head Start (Puma et al., 2010), cash transfers (Aizer et al., 2016), and other programs have had large, positive impacts on children. Having presented evidence for each of the assumptions in this article, we will now discuss its contribution to knowledge.

From a stratification economics perspective, policy interventions must go beyond merely ensuring equal access in theory and actively address the historical and ongoing disadvantages faced by marginalized groups. Initiatives such as expanding universal school meals, subsidizing extracurricular activities, and scaling community-based tutoring networks are not just welfare measures but corrective strategies aimed at countering the unequal intergenerational transfer of resources. In this way, equity policies serve as a crucial counterbalance to the structural reproduction of privilege.

Contribution to knowledge

Throughout the article, the researchers examine the perpetuation of educational disparities and economic stratification in the U.S. educational system, emphasizing the role that racial and socioeconomic factors play in shaping students' experiences. This article emphasizes how property dispossessions, exclusionary policies, and opportunity gaps contribute to wealth inequality. Moreover, it establishes a link between a family's resources, educational advantages, and future career opportunities, reinforcing the notion that wealth begets wealth. Policymakers and researchers across disciplines must understand this reality in order to design interventions that break the cycle of intergenerational disadvantage.

Throughout the article, concrete examples were provided concerning how race and parental income have significantly impacted students' access to resources and opportunities within the American education system. Whether it is in terms of SAT scores or access to advanced placement courses, there is no doubt that racial-wealth disparities exist. Underprivileged groups are subject to economic penalties despite their human capital and educational attainment, challenging the assumption that academic achievement alone guarantees equal opportunity. College admissions discrimination, as well as the impact of teacher biases on student outcomes, underlines the need for systemic changes in the hiring and educational processes. As a result of this contribution, the idea that education alone can be used to address social and economic disparities is challenged.

Additionally, the theory challenges stereotypes and the collective stigmatization of certain racial groups, particularly Black American schoolchildren. The article emphasizes the need to decouple individual behaviors from broader group characteristics and to eliminate biased assumptions. A more nuanced understanding of the intersectionality of race and economic disadvantage is achieved by examining the impact of stereotypes on academic, economic, and social outcomes.

The inclusion of effective public policies in California, such as the Local Control Funding Formula, Universal Meals, and measures addressing the digital divide, serves as a practical contribution. This paper provides examples of how targeted policies can address structural inequities in education, providing a roadmap for policymakers in other regions. The present contribution provides actionable insights into how policies can be designed and implemented in a way that promotes equality and inclusivity. Please refer to Table 1 for more detailed information about future research directions and policy interventions proposed by the researchers.

Conclusion

Overall, stratification economics of education is a useful organizing framework and theoretical approach for researchers working across disciplines. This essay applied stratification economics to American education, focusing on the disparities in intergroup wealth between White American and Black American schoolchildren. It emphasizes the cyclical nature of wealth transfers, the vested interest of dominant groups in maintaining privilege, the economic penalties faced by underprivileged groups, the importance of avoiding generalizations of collective characteristics, and the importance of effective public policy in countering discrimination and fostering equitable outcomes. It provides evidence within the context of education, demonstrating how disparities in resources, disciplinary actions, and educational opportunities contribute to systemic inequality and the oppression of American children. Effective public policies, including the Local Control Funding Formula and California Universal Meals, are cited as examples of effective measures to actively address discrimination and promote inclusivity in education. This analysis and theoretical development emphasize the importance of ongoing evaluation, transparency, and community participation in shaping policies which promote social justice and equity in education. Building on the seminal work of stratification economists, the researchers advance stratification economics of education as one way of uncovering, examining, and conceptualizing disparities between ascriptively distinguished groups in K-12 education in the U.S.

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