Race and Location: The Role Neighborhoods Play in Family Wealth and Well‐Being

Abstract

AbstractA household’s wealth provides an important form of economic security for a family, as well as enabling parents to invest in children to help them realize their aspirations. Yet in the United States, wealth inequality between white families and families of color who are earning the same incomes has reached startling levels. The racial wealth gap, which reduces the opportunities available to African American families, has proved to be a pernicious and enduring phenomenon since it was first identified in 1990. This article identifies and explores the role of neighborhoods in creating and perpetuating the ongoing racial wealth gap. Wealth available to a family influences the neighborhood a family is able to afford to live in: through wealth available to purchase a home or wealth available to put down a deposit on an apartment. This article makes the case that the neighborhood a family lives in not only influences social outcomes, but also influences how much wealth a family can build over the years, either as a homeowner or a renter. It also discusses the key wealth mechanisms that influence neighborhood access as well as how a household’s neighborhood location influences wealth accumulation. Historical government policies created an inequitable landscape of neighborhoods across the United States. Government policies must seek to address this historical injustice.