A New Look at Racial Disparities Using a More Comprehensive Wealth Measure

Abstract: Most research measuring disparities in wealth by race relies on data that exclude resources that are disproportionately important to low-wealth and non-white families, namely defined benefit (DB) pensions and Social Security. This paper finds that once these resources are included, disparities in wealth between white families and Black and Hispanic families are substantially smaller and that they are not rising over time. The powerful equalizing roles of DB pensions and Social Security highlighted here are further motivation for maintaining their fiscal health. This paper also presents results on the wealth of Asian families—typically excluded from most research due to limited sample sizes. Including Asian families is important, however, because they are a rapidly growing segment of the population and they have become the highest-wealth racial group in the United States.

Keywords: inequality; race; Social Security; pensions; saving; wealth;

JEL Classification: D14; D31; D63; E21; G51; H55; H75; I31; J15; J18; J32;

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Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Current Policy Perspectives

Publication Date: 2021-08-16