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Simulating How Large Policy Proposals Affect the Black-White Wealth Gap

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  • Christian E. Weller

    (University of Massachusetts Boston
    Center for American Progress)

  • Connor Maxwell
  • Danyelle Solomon

Abstract

The wealth gap between African-American and White households has persisted for decades, prompting policymakers and experts to suggest several large-scale interventions. We evaluate the possible impact of five such proposals on the Black-White wealth gap. These interventions include debt-free college, baby bonds, civil rights enforcement in housing markets, credit market regulations enforcement, and a national retirement savings plan. Using simulations anchored in data and the existing literature, we conclude that baby bonds would have the single largest effect. But a large wealth gap would remain, even if all five proposals were promptly enacted. Only targeted cash or liquid asset transfers to African-Americans can overcome the persistent wealth difference with White households.

Suggested Citation

  • Christian E. Weller & Connor Maxwell & Danyelle Solomon, 2021. "Simulating How Large Policy Proposals Affect the Black-White Wealth Gap," Journal of Economics, Race, and Policy, Springer, vol. 4(3), pages 196-213, September.
    • Handle: RePEc:spr:joerap:v:4:y:2021:i:3:d:10.1007_s41996-020-00077-8
    DOI: 10.1007/s41996-020-00077-8
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