Authors: Fenaba R. Addo, William A. Darity Jr., and Samuel L. Myers Jr.
Journal: AEA Papers and Proceedings
Abstract: The racial wealth gap in the United States is the object of much misrepresentation and misunderstanding. Our paper is intended to provide a corrective. We will address how the mainstream economic view of the drivers of racial disparities in wealth is a human capital view that promotes anti-Black and personal responsibility narratives while ignoring the significance of the racially uneven transmission of resources across generations. It also fails to acknowledge the cumulative impact of US racial history on present wealth gaps.
Key Findings
- Between 2019 and 2022, the real disparity in the Black-White wealth gap grew by about 23 percent at the median and 16 percent at the mean.
- Inheritance statistics reflect the wealth gap: more White households expect (and receive) inheritances than do Black households. These transfers play an outsized role in the racial wealth gap.
- Federal tax policy has increasingly enabled the passing forward of wealth (to younger generations) at relatively low cost, a development that has disproportionately aided wealth White families.
Citation: Addo, Fenaba R., William A. Darity Jr., and Samuel L. Myers Jr. 2024. “Setting the Record Straight on Racial Wealth Inequality.” AEA Papers and Proceedings 114: 169–73. DOI: 10.1257/pandp.20241102
