Return to Being Black, Living in the Red: A Race Gap in Wealth That Goes beyond Social Origins

Alexandra Killewald, Mathematica Policy Research, Inc.

In the United States, racial disparities in wealth are vast and widening, yet their causes are only partially understood. Conley (1999) argues that the socio-demographic traits of young Black Americans and their parents, particularly parental wealth, wholly explain their wealth disadvantage. I claim that Conley’s analytic sample was limited in three ways: 1) the exclusion of young adults not living independently; 2) an exclusive focus on young adults; 3) a small sample with low statistical power. Following Conley’s sample as they age and making use of data from the 1984-2009 waves of the Panel Study of Income Dynamics, I find a large and statistically significant wealth disadvantage for Black Americans, even after controlling for parental wealth and other socio-demographic traits. The results suggest that race as well as class determine asset-building and that race-blind asset policies aimed at low-income households are insufficient to close the race gap in wealth.