Economics at your fingertips  

Updating the Racial Wealth Gap

Gustavo Suarez and Jeffrey Thompson ()

No 2015-76, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Using newly available data from the Survey of Consumer Finances, this paper updates and extends the literature exploring the racial wealth gap. We examine several hypotheses proposed by previous researchers, including the importance of inherited wealth and other family support and that of trends in local real estate markets, and also extend the literature by exploring the gap across the distribution of wealth and simultaneously considering white, African American and Hispanic households. The findings indicate that observable factors account for all of wealth gap between white and Hispanic households and most of the gap between white and black families ? more than in most previous research ? but a substantial unexplained portion remains. Wealth differences between black and white families are completely due to different asset holdings, while wealth differences between black and Hispanic families are mostly a result of different debt holdings. Home ownership and educational attainment are the single largest observable factors that account for the racial wealth gaps, with income and financial assistance from family members playing important roles as well. The unexplained portion of the wealth gap between white and non-white families is greater at the top of the wealth distribution.

Keywords: Inequality; Racial Wealth Gap; Saving (search for similar items in EconPapers)
JEL-codes: D14 D31 D63 J15 (search for similar items in EconPapers)
Date: 2015-08-22, Revised 2017-11-16
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) Revision (application/pdf) Original (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:

DOI: 10.17016/FEDS.2015.076r1

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2020-09-17
Handle: RePEc:fip:fedgfe:2015-76