Racial Wealth Gap Research Articles

Racial Wealth Gains and Gaps: Nine Facts About the Disparities

Racial Wealth Gains and Gaps: Nine Facts About the Disparities

Estimating the Racial Wealth Gap in Brazil

Estimating the Racial Wealth Gap in Brazil

The Black-White Racial Wealth Gap

The Black-White Racial Wealth Gap

Parallels of Inequity: Analyzing Systemic Discrimination in Virginia Woolf’s Work and Contemporary Racial Disparities in America

This paper explores the enduring impacts of systemic discrimination, drawing parallels between Virginia Woolf’s portrayal of sexism and the pervasive racism affecting African American communities in the United States. Despite the emancipation of slaves and the awarding of citizenship to African Americans post-Civil War, institutionalized racism through Jim Crow laws has perpetuated significant socioeconomic barriers. This discrimination parallels Woolf’s analysis of sexism in "A Room of One’s Own," where she asserts that financial and educational exclusion hinders women’s intellectual and creative potential. Woolf’s critique of the systemic impoverishment of women is mirrored in the racial wealth gap experienced by African Americans, which severely limits their access to higher education and economic advancement. Historical and contemporary examples illustrate how entrenched biases in policy and society maintain these disparities. The paper argues for addressing the root causes of these inequities by ensuring equitable access to resources and opportunities, akin to Woolf’s metaphorical "room of one’s own," to enable true socioeconomic progress for African Americans.

From the racialization of finance to the financing of anti-racism: Tracing the US financial industry’s investments in closing the racial wealth gap

This paper examines profit-seeking investments that US financial industry actors have made in the name of racial justice since the summer of 2020. This trend, which builds on the proposition of “sustainable” finance that private profits and social benefits can coexist, is known in the industry as racial justice investing. To understand how the industry frames racial justice as an object of financial intervention, I draw from theories of social reproduction, racial capitalism, and social finance to analyze the historical and contemporary processes through which racial injustice is conceived in economic terms as a “gap” between the wealth of white and racialized households. Then, I analyze the political economy of these investments, focusing on how solutions to the wealth gap are oriented around extending credit and economic inclusion to racialized households and business owners. Ultimately I illustrate how the financial industry’s investments in closing the racial wealth gap largely sidestep questions of power and, paradoxically, justice that animate many contemporary racial justice movements.

The racial wealth gap, financial aid, and college access

AbstractWe examine how the racial wealth gap interacts with financial aid in American higher education to generate a disparate impact on college access and outcomes. Retirement savings and home equity are excluded from the formula used to estimate the amount a family can afford to pay. All else equal, omitting those assets mechanically increases the financial aid available to families that hold them. White families are more likely to own those assets and in larger amounts. We document this issue and explore its relationship with observed differences in college attendance, types of institutions attended, degrees attained, and education debt using data from the Survey of Consumer Finances (SCF), the National Postsecondary Student Aid Study (NPSAS), and the Panel Study of Income Dynamics (PSID). We show that this treatment of assets provides an implicit subsidy worth thousands of dollars annually to students from families with above‐median incomes. White students receive larger subsidies relative to Black students and Hispanic students with similar family incomes, and this gap in subsidies is associated with disadvantages in educational advancement and student loan levels. It may explain 10 percent to 15 percent of white students’ advantage in these outcomes relative to Black students and Hispanic students.

Changes in the Distribution of Black and White Wealth since the US Civil War

The difference in the average wealth of Black and white Americans narrowed in the first century after the Civil War, but remained large and even widened again after 1980. Given high levels of wealth concentration both historically and today, dynamics at the average may not capture important heterogeneity in racial wealth gaps across the distribution. This paper looks into the historical evolution of the Black and white wealth distributions since Emancipation. The picture that emerges is an even starker one than racial wealth inequality at the mean. Tracing, for the first time, the evolution of wealth of the median Black household and the gap between the typical Black and white household over time, we estimate that the majority of Black households only began to dispose of measurable wealth around World War II. While the civil rights era brought substantial wealth gains for the median Black household, the gap between Black and white wealth at the median has not changed much since the 1970s. The top and the bottom of the wealth distribution show even greater persistence, with Black households consistently over-represented in the bottom half of the wealth distribution and under-represented in the top-10 percent over the past seven decades.

Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860–2020

Abstract The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this article, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the past 150 years, with convergence stalling after 1950. Since the 1980s, the wealth gap has widened again as capital gains have predominantly benefited white households, and convergence via income growth and savings has come to a halt.

Mitigating the Racial Wealth Gap in the United States: Multi-disciplinary Perspectives and Partners

Mitigating the Racial Wealth Gap in the United States: Multi-disciplinary Perspectives and Partners

Making low-income and minority homeownership work: non-profit intermediary networks in the Chicago region

There is renewed political interest in promoting minority homeownership to reduce racial wealth gaps in the United States. In this paper, I call for a policy focus on sustained long-term home-buyer facilitation that could potentially mitigate the multi-faceted risks for low-income and minority households in buying homes, sustaining ownership, and negotiating tenure transitions. I offer an analysis of institutional intermediary structures in a post-crisis community development context that mediates the different stages of homeownership in the Chicago region. Analysis of four qualitative case studies shows that three types of institutions—housing institutions, community-based anchor organisations, and faith-based institutions form robust networks to provide systems of social support that go beyond housing and influence daily life experiences and destabilising life events for marginalised groups. This system of support is crucial as it impacts wealth-building trajectories for marginalised groups. Finally, my research also investigates the fragmentation and gaps in the support networks and makes a case for strengthening multi-scalar community support before rolling out subsidies for homeownership.

Financial Behavioral Health and Investment Risk Willingness: Implications for the Racial Wealth Gap.

Financial behavioral health (FBH) influences numerous socio-ecological domains, affecting investment risk willingness and consequent wealth levels. The experience of FBH by racial group is unknown, and findings of differences between Black and White investors' risk willingness are mixed. The study's aims are to establish an FBH measure and explore its application to risk willingness by racial group. The study used a subset of data from FINRA's 2018 National Financial Capability Study, including Black (n = 2835) and White (n = 21,289) respondents. Through factor analysis, 19 items were confirmed for the FBH measure; the measure was then applied to investment risk willingness using structural equation modeling (SEM). Invariance analyses showed that the FBH model had an excellent fit for White respondents but not Black respondents. The SEM analysis determined that FBH accounted for 37% of the variance in risk willingness (R2 = 0.368; β = 0.256, p < 0.001). Racial group affiliation was a negligible predictor of risk willingness (β = -0.084, p < 0.001). This project contributes an empirical basis for FBH, emphasizes the importance of FBH for investment risk willingness, and elucidates that racial group differences in risk willingness could be an unlikely contributor to the wealth gap.

The 1619 Project: A New Origin Story

In August of 1619, white Virginians purchased enslaved Africans, and the institution of American chattel slavery officially began in what would become the United States of America. The 1619 Project: A New Origin Story, created by Nikole Hannah-Jones, chronicles the importance of 1619 and the lasting legacy of slavery. The details of slavery and post-slavery race relations have not been accurately discussed as part of present-day race relations. Wanting to commemorate this moment in history, the 1619 Project came to be, at first, just a special issue in the New York Times in 2019, then in 2020 expanded into a book. The 1619 Project is authored by many scholars who specialize in civil rights and race-related issues, including activist scholars like Bryan Stevenson, Ibram X. Kendi, and many others. Much of American history starts with the Revolutionary War in 1776. This book emphasizes that Black Americans and the legacy of slavery are often left out of the conversation, leaving a gap in knowledge for studying race critically.To fill in the gaps of American history, Hannah-Jones and the many contributors to this project take us through essential systems in the United States, with the legacy of slavery at the center and how it is the foundation of many American institutions today. Each chapter directly connects America's past to the present. The text focuses on a different aspect of an institution and/or social problem in the United States. For example, Leslie Alexander and Michelle Alexander introduce the chapter titled “Fear” by describing the horrific murder of George Floyd, a name that rings loud for many Americans. They discuss recent killings of Black people by white police and vigilantes, including the case of twenty-five-year-old Ahmaud Arbery, who was chased down and killed by three white men who had suspected him of robbery. The chapter connects these brutal murders to points in history that allowed this type of systemic violence on Black bodies to occur.Other chapters highlight racism in healthcare systems, the wide racial wealth gap, politics, and even music. Each chapter is complemented by poetic interludes that are related to the text, giving the reader a break to connect the critical ideas with beautiful poetry, which includes works by Claudia Rankine, Barry Jenkins, and Jesmyn Ward, to name a few.The systemic violence towards Black people, the racial wealth gap, racism in the healthcare industry, and inequities in the legal system, have often left me with the question “How did we get here?” Students and emerging scholars may have this same question. The 1619 Project begins to offer some answers. By directly connecting many of the issues Black Americans face today and thoroughly explaining the origins of anti-Black racism in history, its authors begin to make very clear how we got here. If we are ever to get to the point of racial equity, understanding systemic racism is the only way to do so. But America must understand and acknowledge this country's past if we ever want to fix our present and future.

The racial wealth gap at the low end of the mortgage distribution: Evidence from smallest dollar mortgage lending in Metro Detroit

The racial wealth gap at the low end of the mortgage distribution: Evidence from smallest dollar mortgage lending in Metro Detroit

Leverage, Monopsony, and the Racial Wealth Gap: A Dynamic Model

Leverage, Monopsony, and the Racial Wealth Gap: A Dynamic Model

Social Security and the Racial Wealth Gap

Social Security and the Racial Wealth Gap

Race-Specific Risk Factors for Homeownership Disparity in the Continental United States

The United States has a racial homeownership gap due to a legacy of historic inequality and discriminatory policies, but factors that contribute to the racial disparity in homeownership rates between White Americans and people of color have not been fully characterized. In order to alleviate this issue, policymakers need a better understanding of how risk factors affect the homeownership rates of racial and ethnic groups differently. In this study, data from several publicly available surveys, including the American Community Survey and United States Census, were leveraged in combination with statistical learning models to investigate potential factors related to homeownership rates across racial and ethnic categories, with a focus on how risk factors vary by race or ethnicity. Our models indicated that job availability for specific demographics, and specific regions of the United States were factors that affect homeownership rates in Black, Hispanic, and Asian populations in different ways. Based on the results of this study, it is recommended policymakers promote strategies to increase access to jobs for people of color (POC), such as vocational training and programs to reduce implicit bias in hiring practices. These interventions could ultimately increase homeownership rates for POC and be a step toward reducing the racial wealth gap.

Building Successful Black-Owned Businesses: How Black Entrepreneurs and White Consumers Can Help Close the Racial Wealth Gap in America

Building Successful Black-Owned Businesses: How Black Entrepreneurs and White Consumers Can Help Close the Racial Wealth Gap in America

Why Is Wealth White?

Racial wealth inequality is no accident of history. Rather, it is the intended result of the southern Democrats in Congress who controlled federal tax policy throughout most of the twentieth century. Beginning in the 1930s, champions of white supremacy, such as Senator Pat Harrison (D-MI), Senator Walter George (D-GA), and Senator Harry F. Byrd, Sr. (D-VA), turned to an ostensibly race-neutral provision of the US income tax code—the preferential treatment of gains from investment—to uphold their (im)moral economy of “whites-only” wealth. After 1965, these segregationists’ successors—particularly Senator Russell B. Long (D-LA) and Senator Lloyd Bentsen (D-TX)—furtively rebuilt and shored up the structure of racial inequality with additional tax breaks (called “tax expenditures”) for investors. Our income tax system embodies—and immortalizes—a Jim Crow–era moral economy of “whites-only” wealth. Thanks to pro-investment tax expenditures, the racial wealth gap has widened over the last four decades as the very richest American households—the white 1 percent—compounded their wealth, at the expense of everyone else.

Association Between Racial Wealth Inequities and Racial Disparities in Longevity Among US Adults and Role of Reparations Payments, 1992 to 2018

In the US, Black individuals die younger than White individuals and have less household wealth, a legacy of slavery, ongoing discrimination, and discriminatory public policies. The role of wealth inequality in mediating racial health inequities is unclear. To assess the contribution of wealth inequities to the longevity gap that exists between Black and White individuals in the US and to model the potential effects of reparations payments on this gap. This cohort study analyzed the association between wealth and survival among participants in the Health and Retirement Study, a nationally representative panel study of community-dwelling noninstitutionalized US adults 50 years or older that assessed data collected from April 1992 to July 2019. Participants included 7339 non-Hispanic Black (hereinafter Black) and 26 162 non-Hispanic White (hereinafter White) respondents. Data were analyzed from January 1 to September 17, 2022. Household wealth, the sum of all assets (including real estate, vehicles, and investments), minus the value of debts. The primary outcome was all-cause mortality by the end of survey follow-up in 2018. Using parametric survival models, the associations among household wealth, race, and survival were evaluated, adjusting for age, sex, number of household members, and marital status. Additional models controlled for educational level and income. The survival effects of eliminating the current mean wealth gap with reparations payments ($828 055 per household) were simulated. Of the 33 501 individuals in the sample, a weighted 50.1% were women, and weighted mean (SD) age at study entry was 59.3 (11.1) years. Black participants' median life expectancy was 77.5 (95% CI, 77.0-78.2) years, 4 years shorter than the median life expectancy for White participants (81.5 [95% CI, 81.2-81.8] years). Adjusting for demographic variables, Black participants had a hazard ratio for death of 1.26 (95% CI, 1.18-1.34) compared with White participants. After adjusting for differences in wealth, survival did not differ significantly by race (hazard ratio, 1.00 [95% CI, 0.92-1.08]). In simulations, reparations to close the mean racial wealth gap were associated with reductions in the longevity gap by 65.0% to 102.5%. The findings of this cohort study suggest that differences in wealth are associated with the longevity gap that exists between Black and White individuals in the US. Reparations payments to eliminate the racial wealth gap might substantially narrow racial inequities in mortality.

Medical Student Debt and the US Infectious Diseases Workforce.

Student debt in the United States is at historically high levels and poses an excessive burden on medical graduates. Studies suggest that financial limitations dissuade some medical trainees from pursuing careers in infectious diseases (ID) and other cognitive specialties, despite their interest in the subject matter. Addressing student debt may have a transformative impact on ID recruitment, diversification of the ID workforce, and contributions of ID physicians to underserved public health needs. Relief of student debt also has the potential to narrow the racial wealth gap because nonwhite students are more likely to finance their postsecondary education, including medical school, with student loans, yet they have a lower earning potential following graduation. An executive order from the Biden-Harris administration announced in August 2022 presents a first step toward student debt relief, but the policy would need to be expanded in volume and scope to effectively achieve these goals.