The Decline of African-American and Hispanic Wealth since the Great Recession

Edward N. Wolff

No 25198, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The ratio in standard net worth NW between African-Americans and (non-Hispanic) whites was the same in 2007 as in 1983 (0.19) but then fell to 0.14 in 2016, while that between Hispanics and whites climbed from 0.16 to 0.26 but then plunged to 0.19. Minorities had much higher debt-net worth ratios in 2007 – 0.55 for blacks, 0.51 for Hispanics, and 0.18 for whites. Minorities also had a higher share of assets in homes than whites – 0.54 and 0.53 versus 0.31. Decomposition analysis reveals that the lower return on wealth for minorities explained a large share of the widening wealth gap between 2007 and 2010. From 2010 to 2016, the return was higher for minorities but this was offset by larger dissavings. Adding pension and Social Security wealth to standard wealth substantially lowers the wealth gap. The racial ratio of mean augmented wealth AW (net worth, pension, and Social Security wealth) was 0.27 in 2016 and the ethnic ratio was 0.28. The racial gap was the same in 2016 as in 1989, while the ethnic ratio increased from 0.25 to 0.28. In 2016, NW inequality was considerably higher for blacks and Hispanics than whites (by 0.120 and 0.093 Gini points, but AW inequality was considerably lower (by 0.098 and 0.067 points). While AW inequality increased by 0.067 Gini points for whites from 1989 to 2016, it fell by 0.046 points for blacks and by 0.015 points for Hispanics. Social Security was the principal factor.

JEL-codes: D31 J15 (search for similar items in EconPapers)
Date: 2018-10
Note: LS PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.nber.org/papers/w25198.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25198

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25198

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().