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Racial Wealth Disparities Is the Gap Closing?

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Edward N. Wolff

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Abstract

Despite decades of policies aimed at improving the economic position of African Americans in terms of relative income and earnings, they remain substantially behind whites, and research presented in this brief indicates that the wealth gap is even more staggering. Following families over time in order to understand racial differences in the sources and patterns of wealth accumulation, the author finds that African Americans would have gained significant ground relative to whites in the past 30 years if they had inherited similar amounts, comparable levels of family income, and more similar portfolio compositions. Therefore, even if the income gap between whites and African Americans were immediately eliminated, it may take another two generations for the wealth gap to close. However, certain policies could help speed up the process.

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Paper provided by Levy Economics Institute, The in its series Economics Public Policy Brief Archive with number 66.

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  1. René Morissette & Xuelin Zhang & Marie Drolet, 2003. "The Evolution of Wealth Inequality in Canada: 1984-1999," Economics Working Paper Archive 396, Levy Economics Institute, The. [Downloadable!]
  2. Ronald L. Straight, 2002. "Wealth: Asset-Accumulation Differences by Race–SCF Data, 1995 and 1998," American Economic Review, American Economic Association, vol. 92(2), pages 330-334, May. [Downloadable!]
  3. Joseph G. Altonji & Ulrich Doraszelski, 2000. "The Role of Permanent Income and Demographics in Black/White Differences in Wealth," Working Papers 850, Economic Growth Center, Yale University. [Downloadable!]
    Other versions:
  4. Deborah Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth of Mexican Americans," CEPR Discussion Papers 519, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
    Other versions:
  5. Robert Fairlie & Alicia Robb, 2005. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," Working Papers 05-06, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  6. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Portfolio Choices of Hispanic Couples," IZA Discussion Papers 1948, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Deborah A. Cobb-Clark & Vincent Hildebrand, 2003. "The Wealth and Asset Holdings of U.S.-Born and Foreign-Born Households: Evidence from SIPP Data," Social and Economic Dimensions of an Aging Population Research Papers 89, McMaster University. [Downloadable!]
    Other versions:
  8. Fairlie, Robert W. & Robb, Alicia M., 2004. "Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital," IZA Discussion Papers 1292, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Asena Caner, 2003. "Savings of Entrepreneurs," Economics Working Paper Archive 390, Levy Economics Institute, The. [Downloadable!]
  10. Morissette, René & Zhang, Xuelin & Drolet, Marie, 2002. "The Evolution of Wealth Inequality in Canada, 1984-1999," Analytical Studies Branch Research Paper Series 2002187e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  11. Rania Antonopoulos & Maria Sagrario Floro, 2005. "Asset Ownership along Gender Lines: Evidence from Thailand," Economics Working Paper Archive wp418, Levy Economics Institute, The. [Downloadable!]
  12. Asena Caner, Edward N. Wolff, . "Asset Poverty in The United States: Its Persistence in an Expansionary Economy," Economics Public Policy Brief Archive 76, Levy Economics Institute, The. [Downloadable!]
  13. Michael A. Stegman & Allison Freeman & Jong-Gyu Paik, 2007. "The portfolios and wealth of low-income homeowners and renters: findings from an evaluation of Self-Help Ventures Fund’s Community Advantage Program," Community Development Investment Center Working Paper 2007-02, Federal Reserve Bank of San Francisco. [Downloadable!]
  14. Edward N. Wolff & Ajit Zacharias, 2003. "The Levy Institute Measure of Economic Well-Being," Economics Working Paper Archive 372, Levy Economics Institute, The. [Downloadable!]
  15. Rene Morissette & Xuelin Zhang & Marie Drolet, 2004. "The Evolution of Wealth Inequality in Canada, 1984-1999," Microeconomics 0401004, EconWPA. [Downloadable!]
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