Why do some racial groups have more wealth than others? That’s a question researchers have long tried to answer, and inheritances and other forms of intergenerational wealth are often viewed as major factors. But Federal Reserve Bank of Boston economist Jeff Thompson says they play a surprisingly minor role.

On the latest episode of the Six Hundred Atlantic podcast, Thompson discusses the findings of a paper he co-authored, “The Limited Role of Intergenerational Transfers for Understanding Racial Wealth.”

The paper finds that three facts about inheritances limit its role in the nation’s racial wealth gaps: 1) Most people don't receive an inheritance; 2) Most inheritances aren't substantial; 3) People tend to consume or squander a good part of whatever inheritance they do receive.

“The generational aspect of wealth is simply far less important than most people imagine,” Thompson says in the interview. “For the vast majority of families, nearly all of the wealth that you have will be wealth that you build during your lifetime and you consume up until the point you die.”

Thompson says the number of hours worked over a lifetime per household is a far more influential variable. He also offers thoughts on where policymakers looking to close racial wealth gaps should focus.

Listen on the Six Hundred Atlantic episode page.