Asset-Building: Explaining the Racial/Ethnic Wealth Gap

The racial/ethnic wealth gap in this country is both huge and persistent. The ratio between the median net worth of white households and African American households is nearly 7:1, while the white-Hispanic ratio is nearly 5:1 (Bucks, Kennickell, and Moore 2006). Despite increased awareness of these gaps, clear consensus has yet to emerge about the steps needed to narrow them. Some of this lack of consensus relates to a lack of understanding of the causes of this disparity.

This report explores the determinants of wealth and of the racial/ethnic disparities in asset and wealth accumulation. The narrative provides an overview of past research1 that has addressed this issue and highlights the most relevant findings. Its goal is to shed light on the causes of the racial/ethnic wealth gap and to provide answers to the question, “What’s race got to do with it?”


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Friday, January 1, 2010