The Growth in Wealth Inequality in the Great Recession

Rakesh Kochhar, Pew Hispanic Center

This paper analyzes the widening gaps in wealth across racial and ethnic groups during the Great Recession and the increasing divide between the rich and poor within each group. Estimates from Survey of Income and Program Participation (SIPP) data show that the wealth gaps between white, black and Hispanic households doubled between 2005 and 2009. Moreover, the white-to-black and white-to-Hispanic wealth ratios in 2009 were at their highest levels since the government began publishing such data a quarter century ago. The two key extensions in this paper are an analysis of how the Great Recession affected within group inequality in wealth and the addition of 2010 SIPP data. Combined with 2009 data from the same SIPP panel, the new data permit a longitudinal analysis of the determinants of wealth destruction in the post-recession era.