Black Households Research Articles

Subsidizing Interest Rates to Bridge the Racial Wealth Gap

There is a large, persistent, and worsening wealth gap between Black and White households in the United States. Black families’ median and mean wealth is less than 15 percent that of White families (Bhutta et al. 2020). New research shows current monetary policies designed to aid in the economic recovery from the COVID-19 recession will likely exacerbate this wealth gap (Bartscher et al. 2021, 33). This paper proposes issuing a government-subsidized two percent mortgage interest rate reduction for prospective Black homebuyers to provide a financial incentive for Black households to build wealth and to promote integrative behavior among neighborhoods.

The Large Gap in Stock Market Participation Between Black and White Households

The Large Gap in Stock Market Participation Between Black and White Households

U.S. Households’ Children's Drink Purchases: 2006–2017 Trends and Associations With Marketing

Sugar-sweetened beverages contribute a large proportion of added sugar in young children's diets; yet, companies market sugar-sweetened children's drinks extensively to children and parents. This study examines the changes in children's drink purchases by U.S. households with young children and the associations with marketing practices. Longitudinal Nielsen U.S. household panel data provided monthly volume purchases by children's drink category (sugar-sweetened fruit drinks and flavored water and unsweetened juices) among households with young children (aged 1-5 years) from 2006 to 2017. Differences by household race/ethnicity and income were assessed. The 2-part models examined the associations between household purchases and marketing (including price and brand TV advertising) for each category, controlling for sociodemographics. Data were collected and analyzed in 2019-2020. Households' volume purchases of children's fruit drinks and unsweetened juices declined from 2006 to 2017, whereas flavored water purchases increased. Non-Hispanic Black households purchased significantly more fruit drinks (351.23 fluid ounces/month, 95% CI=342.63, 359.82) than non-Hispanic White (204.43 fluid ounces/month, 95% CI=201.81, 207.05) and Hispanic (222.63 fluid ounces/month, 95% CI=217.11, 228.15) households. Low-income households purchased more fruit drinks and fewer unsweetened juices than higher-income households (p<0.001). TV brand advertising was positively associated with purchases across all categories, and this relationship was stronger for low-income households (p<0.05). Despite expert recommendations that young children do not consume Sugar-sweetened beverages, households with young children purchase more sweetened fruit drinks than unsweetened juices. Extensive TV advertising for children's drink brands may exacerbate the racial and income disparities in sugar-sweetened beverage purchases. Public health initiatives to address sugar-sweetened beverage consumption by young children and restrictions on marketing sugar-sweetened beverages to children are necessary.

Re-Examining the Effect of Job Sprawl on the Black-White Housing Consumption Gap: Evidence Following the Great Recession

This article examines the association between employment decentralization and the Black-White housing consumption gap since the Great Recession. This research investigates the extent to which post-recession spatial patterns of employment facilitate, or impede, the recovery for Black households. The model estimates a statistically significant correlation between job sprawl and the Black-White housing gap, although the direction depends upon the level of sprawl and measure of housing consumption. For example, while job sprawl is associated with a reduction in the Black-White unit size gap, that association only holds in high-sprawl metropolitan areas. In one area of improvement since the recession, job sprawl is correlated with a reduction in the ownership gap in a majority of metropolitan areas. However, job sprawl is also correlated with an intensification of the suburban ownership gap in the vast majority of metropolitan areas in the study. This study counters conventional arguments that unplanned sprawl may reduce intergroup inequality, and that metropolitan land use regulations may therefore exacerbate inequality. The results of this research demonstrate that inequality persists in light of competitive market forces that generate sprawl. Metropolitan land use policies that mitigate sprawl may therefore be legitimate tools for mitigating intergroup inequality in metropolitan housing markets.

Wealth Inequality and Return Heterogeneity during the COVID-19 Pandemic

Wealth inequality in the U.S., measured by the top 1% wealth share, experienced dramatic changes in the first year of the COVID-19 pandemic. Economic theory suggests that the key to understanding wealth inequality is heterogeneity in the return to net worth across households. To understand the dynamics of wealth inequality during the COVID-19 pandemic, we develop a novel methodology that allows us to estimate the returns to net worth for different groups of households at relatively high frequency. We show that portfolio heterogeneity and asset price movements are the main determinants of wealth returns and inequality, whereas saving-rate heterogeneity and within-class return differences played a minor role. As the stock market continued to outperform the housing market, the return of the wealthy has risen faster than that of other households, reinforcing the wealth concentration at the top. We also document a widening racial return gap between white and black households later in the pandemic. Nearly all of the racial differences in the wealth return, however, are explained by the differences in wealth, not by race itself. Whereas the previous literature has evaluated return heterogeneity and its implications for long-run wealth inequality in low-frequency data, our analysis suggests that return heterogeneity together with large asset price movements is also the key to understanding short-run dynamics in wealth inequality.

A Pathway to Racial Equity: Student Debt Cancellation Policy Designs

Student debt in the United States has had a disproportionate negative impact on black and Latinx borrowers. We argue that analyses of plans proposing student debt cancellation should therefore foreground their potential impact on racial equity. To do so, we use data from the 2019 Survey of Consumer Finances and model the impact of debt cancellation on four key policy outcomes (reach, impact on the most vulnerable borrowers, borrower wealth gains, and impact on racial wealth gaps). We examine universal policy designs as well as designs that incorporate an income eligibility threshold as a means of targeting benefits toward less affluent borrowers. We find that cancellation amounts ranging from $50,000 to $75,000 yield the most desirable outcomes, especially when paired with a relatively low household income eligibility cutoff at between $100,000 and $150,000. Such policies would cancel roughly half of all outstanding student debt without substantially expanding the racial wealth gap, while still reaching a large majority of borrowers and leading to substantial wealth gains, especially for black households.

SNAP participation among low-income US households stays stagnant while food insecurity escalates in the months following the COVID-19 pandemic

The COVID-19 pandemic led to increased food-insecurity rates, particularly among low-income households. Participation in the Supplemental Nutrition Assistance Program (SNAP) was expected to rise in response. We surveyed 931 US residents from households with annual incomes below $50,000 to collect information on food security and food assistance program participation in the year prior to the pandemic and in the first four months of the pandemic, along with household and individual-level demographics. Food insecurity increased from 31% prior to the pandemic to 39% in the first four months of the pandemic, while self-reported SNAP participation stagnated. Even more alarmingly, among low-income households that were also food-insecure, 47% reported participating in SNAP prior to the pandemic but only 39% did so in the first four months following the pandemic’s onset. In particular, Black households, households with children, and those in the lowest income category experienced the largest declines in SNAP participation. Food assistance programs designed to alleviate hunger should facilitate participation among the most vulnerable, especially when these groups are faced with multiple challenges, like during the COVID-19 pandemic.

The Racial Wealth Gap and Access to Opportunity Neighborhoods

Some Black households live in neighborhoods with lower incomes, as well as higher unemployment rates and lower educational attainment, than their own incomes might suggest, and this may impede their economic mobility. We investigate reasons for the neighborhood sorting patterns we observe and find that differences in financial factors such as income, wealth, or housing costs between Black and white households do not explain racial distributions across neighborhoods. Our findings suggest other factors are at work, including discrimination in the housing market, ongoing racial hostility, or preferences by Black households for the strength of social networks or other neighborhood amenities that some lower-socioeconomic locations provide.

Social Determinants of Housing Quality for U.S. Immigrants: Intersections of Nativity, Race, and Socioeconomic Status

BACKGROUND AND AIM: Indoor hazards can cause poor health with disproportionate burdens among racial/ethnic minorities and low socioeconomic status (SES) households. Little research has examined residential environmental exposures by nativity status, despite immigrants being a rapidly growing U.S. population. We investigated residential characteristics and housing quality by nativity and their intersections with race and SES in the national 2015 American Housing Survey (AHS). METHODS: We generated risk scores for 11 poor-housing quality domains from 54 AHS variables: electricity, thermal discomfort, indoor and outdoor structures, lead-paint risk, bathroom and kitchen facilities, pests, mold, combustion sources, and crowding. We examined clustering of demographic and socio-contextual factors using polyserial correlations. We ran negative binomial regressions to evaluate risk scores by nativity, race, SES, and their interactions and adjusted for socio-contextual factors. RESULTS:Socio-contextual factors correlated with poor-housing quality included being a single-parent, older building age, and poor neighborhood quality and were more prevalent among non-white and low SES households. Adjustment for these factors explained some but not all observed demographic disparities in poor-housing quality. Notably, immigrants had higher risks for crowding, combustion sources, pests, thermal discomfort, and mold than U.S.-natives (exp[ß-hat]:1.08-3.15). Black households had higher risks for the most poor-housing quality domains than other race groups (1.07-1.77). Households at 0-100% federal poverty-level had higher risks for almost all domains compared to higher-income households (1.06-4.08). At the intersections of race and nativity, Latinx and Asian immigrants had higher risks of lead-paint exposure and combustion sources, respectively, than their U.S.-native counterparts. In contrast, Black U.S.-natives fared worse for outdoor structure and combustion sources than Black immigrants. CONCLUSIONS:In the U.S., we found significant disparities in housing quality, with non-white immigrant, Black U.S.-native, and low SES households experiencing worse housing conditions. Our findings underscore the importance of an intersectional framework to identify residential environmental exposure disparities and their socio-contextual drivers. KEYWORDS: Exposures, Environmental disparities, Socio-economic factors, Built environment, Housing quality

Black-white racial disparities in household food insecurity from 2005 to 2014, Canada.

ObjectivesTo understand the differential vulnerability to household food insecurity of the Black population as compared with white counterparts in Canada.MethodsUsing data for households with Black and white respondents in pooled Canadian Community Health Survey cycles from 2005 to 2014, the 18-question Household Food Security Survey Module was analyzed (N = 491,400). Bivariate and multivariate logistic and multinomial regression models were run using respondent’s race, immigration status, and six well-established predictors of household food insecurity in the general population. Additional multivariable logistic regression models were run, with race interacted with each predictor individually to yield predicted probabilities.ResultsThe weighted prevalence of household food insecurity was 10.0% for white respondents and 28.4% for Black respondents. The odds of Black households being food-insecure as compared with white households fell from 3.56 (95% CI: 3.30–3.85) to 1.88 (95% CI: 1.70–2.08) with adjustment for household socio-demographic characteristics. In contrast with white households, there was relative homogeneity of risk of food insecurity among Black subgroups defined by immigration status, household composition, education, and province of residence. Homeownership was associated with lower probabilities of food insecurity for Black and white households, but the probability among Black owners was similar to that for white renters (14.7% vs. 14.3%). Black households had significantly higher predicted probabilities of food insecurity than their white counterparts across all main sources of household income except child benefits and social assistance.ConclusionBeing racialized as Black appears to be an overriding factor shaping vulnerability to food insecurity for the Black population in Canada. Future research and public policy on food insecurity should seriously consider the role of racism at the systemic and institutional levels.

Ethnic minorities’ access to mortgages in the UK: The undesirable impact of the Great Financial Crisis

We examine whether households from ethnic minorities have the same ability to access mortgages in the UK in the period after the Great Financial Crisis (GFC) of 2007–2009. Using a large sample of 20,120 households, we find that Black households are less likely to obtain mortgages in comparison to economically similar White households. Comparing our results to previous studies’ findings, we argue that Black households’ inability to access mortgages have deteriorated further in the post-GFC period.

Differential Rates of Return and Racial Wealth Inequality

Using data on household balance sheets from the Survey of Consumer Finances and data on macroeconomic rates of return from Jordà et al. (Q J Econ. 134(3):1225–1298, 2019) we construct two alternative series for household rates of return by race from 1989 to 2016. Our estimates suggest a persistent racial gap in the rate of return on assets between 1 and 4 percentage points. The gap in returns remains even after conditioning on demographic factors, labor market factors, credit history, portfolio composition, household attitudes toward savings, financial literacy, and inheritance—suggestive of a role for discrimination. Recentered influence function (RIF) decompositions indicate between 40 and 53%—1.2 to 1.6 percentage points—of the difference in median returns between Black and White households is unexplained by observable characteristics. A standard Oaxaca-Blinder decomposition suggests that differential rates of return can explain up to 14% of the racial wealth gap at the mean. Finally, our data on differential rates of return allow us to effectively rule out explanations for the racial wealth gap based on myopia or excessive time preference. Given observed series for consumption and rates of return, a standard lifecycle model requires Black households to discount the future less than White households in order to match the data.

Disparate Recoveries: Wealth, Race, and the Working Class after the Great Recession

What does it mean to be working class in a society of extreme racial wealth inequality? Using data from the Survey of Consumer Finances, we investigate the wealth holdings of Black, Latinx, and white working-class households during the post–Great Recession (pre–COVID-19) period that spanned 2010 to 2019. We then explore the relationship between working-class and middle-class attainment using a wealth-based metric. We find that, in terms of their net worth, fewer Black working-class households benefitted from the economic recovery than white working-class households. Among white households, the working class saw the greatest increase in wealth in both absolute and relative terms. Working-class households were less likely to be middle class as defined by their wealth holdings, and Black and Latinx households were also less likely to be middle class. For Black households, racial identity is a stronger predictor of wealth attainment than occupational sector.

SNAP Participants and High Levels of Food Insecurity in the Early Stages of the COVID-19 Pandemic.

The coronavirus disease 2019 (COVID-19) pandemic has disproportionately strained households experiencing poverty, particularly Black and Latino households. Food insecurity, which entails having limited or uncertain access to a sufficient quantity of nutritious food, is a key pandemic-related consequence. We examined how people enrolled in the Supplemental Nutrition Assistance Program (SNAP) have been affected by the pandemic, particularly Black participants and participants residing in food deserts. Using survey data from a longitudinal cohort study of predominantly Black low-income adults aged ≥18 residing in urban food deserts in Pittsburgh, Pennsylvania, we examined changes in food insecurity and SNAP participation before COVID-19 (2018) and early in the COVID-19 pandemic (March-May 2020). We modeled changes in food insecurity from 2018 to 2020 via covariate-adjusted logistic regression. Food insecurity increased significantly among participants enrolled in SNAP and surveyed in both 2018 and 2020 (from 25.9% in 2018 to 46.9% in 2020; P < .001). Compared with cohort participants not enrolled in SNAP at both points, cohort participants enrolled in SNAP in 2018 and 2020 had the highest rates of using a food bank in 2020 (44.4%) and being newly food insecure in 2020 (28.9%) (ie, they were food insecure in 2020 but not in 2018). Food insecurity during the COVID-19 pandemic increased among low-income Black households enrolled in SNAP and residing in a food desert. Public health recovery efforts might focus on modifying SNAP to improve the food security of people experiencing poverty.

There and Back Again: A Commentary on Social Welfare Policy in the Wake of 2020

There and Back Again: A Commentary on Social Welfare Policy in the Wake of 2020

Unions, Race, Ethnicity, and Wealth: Is There a Union Wealth Premium for People of Color?

Black, Latinx, Native American, and many Asian households often have less wealth than White ones do. This racial wealth gap may be smaller among union members than nonunion members if union membership positively correlates with more wealth and if that correlation is greater among people of color than among White households. We use summary statistics and regression analyses based on the Federal Reserve’s triennial Survey of Consumer Finances from 1989 to 2019 for our analyses. We find that households of all races and ethnicities have more wealth as union members than as nonunion members. This increase is larger for Black households and households of other races than it is for Whites.

COVID-19, Black jurisdictions, and budget constraints: how fiscal footing shapes fighting the virus

ABSTRACT In the United States (U.S.), most reports regarding racial disparities in incidence and death from COVID-19 understate the importance of majority-Black local jurisdictions’ fiscal capacity in shaping African Americans’ resilience during the pandemic and majority-Black locales’ economic trajectories afterward. Black households and jurisdictions manage legacy and ongoing racialized capitalism. My data are fieldwork findings from a 2017 and 2018 study of the U.S. county with the highest concentration of middle-class African Americans, Prince George’s County (PGC), Maryland, a suburb of Washington, D.C., alongside government reports on how D.C.-area counties experience COVID-19 fallout. I find PGC’s fragile fiscal state prior to the coronavirus means it weathers harsher consequences from COVID-19 than two neighbouring counties with significantly smaller Black populations. My analysis explicates how layers of racial disadvantage compound across time, region, and level of social organization.

Monetary Policy and Racial Inequality

This paper aims at an improved understanding of the relationship between monetary policy and racial inequality. We investigate the distributional effects of monetary policy in a unified framework, linking monetary policy shocks both to earnings and wealth differentials between black and white households. Specifically, we show that, although a more accommodative monetary policy increases employment of black households more than white households, the overall effects are small. At the same time, an accommodative monetary policy shock exacerbates the wealth difference between black and white households, because black households own less financial assets that appreciate in value. Over multi-year time horizons, the employment effects are substantially smaller than the countervailing portfolio effects. We conclude that there is little reason to think that accommodative monetary policy plays a significant role in reducing racial inequities in the way often discussed. On the contrary, it may well accentuate inequalities for extended periods.

Monetary Policy and Racial Inequality

This paper aims at an improved understanding of the relationship between monetary policy and racial inequality. We investigate the distributional effects of monetary policy in a unified framework, linking monetary policy shocks both to earnings and wealth differentials between black and white households. Specifically, we show that, although a more accommodative monetary policy increases employment of black households more than white households, the overall effects are small. At the same time, an accommodative monetary policy shock exacerbates the wealth difference between black and white households, because black households own fewer financial assets that appreciate in value. Over a five-year horizon, the employment effects remain substantially smaller than the countervailing portfolio effects.

The Looming COVID-19 Housing and Health Crisis in the US: Results from a National and Four-City Survey

Affordable housing is a key determinant of health, and it has become a major issue for millions of vulnerable households during the COVID-19 pandemic. Little is known about Americans’ financial burdens in paying for housing costs during the COVID-19 pandemic, particularly after federal aid was initially distributed. In a randomized, representative survey of households nationally and in the four largest U.S. cities during the COVID-19 pandemic (n=3,454), we found widespread, serious burdens reported with paying for housing costs (including rent, mortgage, and utilities). Nationally, forty percent of households with employment disruptions (40%) reported serious financial problems paying their housing costs, including half or more in New York (50%), Los Angeles (50%), and Houston (60%). More than one-third of renters nationally (38%) and in the four largest U.S. cities (Houston – 59%, Los Angeles – 50%, New York City – 38%, Chicago – 37%) reported serious problems paying housing costs during this time. Serious cost burdens were concentrated among renters, Black and Hispanic households, and households with recent job or wage losses. The federal government earmarked limited funding specifically toward improving housing stability in December 2020, but it was a fraction of what is believed necessary to provide stability to the housing market for vulnerable groups. A patchwork of housing and financial protection programs are set to expire in 2021 with limited ongoing mechanisms to cover back rent or utility payments, widely placing vulnerable households at risk for health and economic problems unless further policy action is taken.