Disparities in parents’ wealth a key driver of racial wealth gap
Researchers at a poverty conference last week sought to dispel the narrative that hard work, careful economic decisions and formal higher educational attainment are enough to close the wealth gap between blacks and whites. Far more significant in determining children’s future wealth is their parents’ ability to give them financial assistance, speakers said, adding that continued emphasis on pulling oneself up by one’s bootstraps gets in the way of creating a more accurate picture of the situation and actions needed.
“One of our deepest held American narratives is that success comes from grit and gumption and working hard,” said Anne Price, president of the Insight Center for Community Economic Development, during a panel on closing racial wealth gaps. “[But] for black families, studying and working hard doesn’t necessarily mean that they’ll amass the same amount of wealth as white families. Family resources really matter in the ability to actually accumulate wealth — what families are able to pass down from generation to generation plays a big role in where you end up.”
The panel came as part of a two-day Disrupting the Poverty Cycle conference, hosted at UMass-Boston. The event was organized by Economic Mobility Pathways, a Massachusetts-based group that seeks to bring economic advancement to low-income individuals through programs, research and advocacy.
Panelists focused their attention on wealth, defined as the value of what someone owns — such as a house, business, car and retirement savings — minus what the person owes.
The researchers analyzed data from a University of Michigan study that has followed a set of U.S. households from 1968 on, with the latest available data reflecting 2013, as well as data from another study that asked the same question but focused in more detail on select cities, including Boston.
Individuals were asked to self-identify their “main” race. In cases where the person was black-white biracial, they were identified as black. According to Khaing Zaw, statistical research associate for the Samuel DuBois Cook Center at Social Equity, Duke University, the wealth of such biracial individuals more closely matched that of blacks than whites.