Accounting for Racial Wealth Disparities in the United States
While there have always been substantial differences in the wealth accumulated by the white, black, and Hispanic families living in the United States, these differences had remained relatively constant over most of the last three decades before rising sharply during the Great Recession. The greater losses in net worth that nonwhite families experienced between 2007 and 2010 has inspired renewed interest in understanding the factors that drive these enduring racial wealth disparities. This paper uses data from the Federal Reserve Board’s Survey of Consumer Finances (SCF) to update and extend the existing literature, and explores the key factors contributing to the wealth gap that persists among white, black, and Hispanic families.
The study focuses on the period from 2001 through 2016, and captures the decade containing the beginning of and the full recovery from the Great Recession. The analysis focuses on three key outcome variables—net worth, total assets, and total debt—and seeks to identify what factors may influence racial differences in wealth accumulation.