Background: Educational attainment is often regarded as a pathway to economic stability and social mobility. However, the Minorities’ Diminished Returns (MDRs) framework has demonstrated that the effects of educational attainment on various economic, behavioral, and health outcomes are weaker for marginalized populations, including racial/ethnic minorities, immigrants, LGBTQ+ individuals, and those living in disadvantaged areas. While MDRs have been documented for various marginalized demographic groups, the role of trauma in moderating socioeconomic outcomes remains underexplored. Objective: This study examines whether lifetime trauma exposure diminishes the positive association between educational attainment and poverty-to-income ratio (PIR), a key indicator of economic well-being. Methods: Using data from the National Survey of American Life (NSAL), we analyzed a nationally representative sample of 6,008 adults, including Black, White, Latino, and Other racial/ethnic groups. We employed linear regression models to evaluate the association between the independent variable educational attainment and the outcome PIR. We then tested lifetime trauma as a moderator of this association. Models controlled for age, gender, employment, and race/ethnicity. Results: Educational attainment was positively associated with PIR across all groups, but the strength of this association was significantly attenuated for individuals with a history of lifetime trauma. These effects were independent of covariates. Conclusions: These findings extend the MDRs framework by highlighting trauma as a potential contributor to diminished returns of education on socioeconomic wellbeing. Structural inequities that increase trauma exposure in minoritized populations may also limit the economic benefits of education, particularly for groups with multiple trauma exposures. Policies aimed at addressing economic inequality must integrate social policies that reduce trauma and stress.

Background: Parental education is a key determinant of household income, but its benefits are not uniformly distributed across racial groups. According to the Minorities' Diminished Returns (MDRs) theory, the socioeconomic benefits of resources such as parental education are systematically lower for minority families, particularly Blacks who have been subjected to slavery, segregation, racism, and discrimination. Objective: This study aims to investigate the diminished returns of parental education on household income among Black college students in the US. Methods: Using data from the Higher Education Research Institute (HERI) Freshman Student Survey, we analyzed the associations between race, parental education, and household income. The sample included 2,235,733 students, comprising 2,191,543 White and 441,90 Black freshman college students. We conducted regression analyses to examine the association between parental education and household income, adjusting for relevant covariates. Results: Our findings indicated that higher parental education is associated with higher household income in the pooled sample. We also found a positive association between parental education and household income for both Black and White college students. However, the magnitude of this positive association was significantly smaller for Black students compared to White students, demonstrating diminished returns of parental education on household income for Black families. Discussion: The results support the theory of Minorities' Diminished Returns, highlighting the need for policies that address the systemic barriers contributing to sustained economic inequality. These barriers go beyond parental education, resulting in income differences between similarly educated White and Black families.