The Role of Permanent Income and Demographics in Black/White Differences in Wealth
Open accessAbstract
We explore the extent to which the huge race gap in wealth can be explained with properly constructed income and demographic variables.In some instances we explain the entire wealth gap with income and demographics provided that we estimate the wealth model on a sample of whites.However, we typically explain a much smaller fraction when we estimate the wealth model on a black sample.Using sibling comparisons to control for intergenerational transfers and the effects of adverse history, we find that differences in income and demographics are not likely to account for the lower explanatory power of the black wealth models.Our analysis of growth models of wealth suggests that differences in savings behavior and/or rates of return play an important role.
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Self-employment is associated with higher net worth.
“Self-employment is associated with higher net worth (Altonji & Doraszelski 2005, Menchik & Jianakoplos 1997), as is stock ownership (Hurst et al. 1998).”
From Wealth Inequality and Accumulation (2017) · cites this paper as Altonji & Doraszelski 2005
African-Americans' wealth appears less responsive than whites' to traits including income, education, and marital history.
“African-Americans’ wealth appears less responsive than whites’ to their traits, including income, education, and marital history (Addo & Lichter 2013, Altonji & Doraszelski 2005, Campbell & Kaufman 2006, Oliver & Shapiro 2006).”
From Wealth Inequality and Accumulation (2017) · cites this paper as Altonji & Doraszelski 2005
Race differences in asset portfolios, including business assets and self-employment, may contribute to the race gap in wealth.
“Race differences in asset portfolios, including business assets and self-employment, may contribute to the race gap in wealth as well (Altonji & Doraszelski 2005, Conley 2001a, Gittleman & Wolff 2004, Hurst et al. 1998, Keister 2000, Menchik & Jianakoplos 1997, Oliver & Shapiro 2006).”
From Wealth Inequality and Accumulation (2017) · cites this paper as Altonji & Doraszelski 2005
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Public Health Insurance and Private Savings
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Cited by
Sorted by citations
Wealth Inequality and Accumulation
Killewald, A., Pfeffer, F. T., & Schachner, J. N. (2017) · Annual Review of Sociology · doi:10.1146/annurev-soc-060116-053331 · Cited by 469 · see citing works
“African Americans’ wealth appears less responsive than whites’ to their traits, including income, education, and marital history (Addo & Lichter 2013, Altonji & Doraszelski 2005, Campbell & Kaufman 2006, Oliver & Shapiro 2006).”
BackgroundKillewald, A. (2013) · Demography · doi:10.1007/s13524-012-0190-0 · Cited by 92 · see citing works
Permanent Income and the Black-White Test Score Gap
Rothstein, J., & Wozny, N. (2013) · Journal of Human Resources · doi:10.3368/jhr.48.3.510 · Cited by 41 · see citing works
- Authors
- Altonji, J. G., & Doraszelski, U.
- ORCID
- Altonji, Joseph G.
- Venue
- Journal of Human Resources
- Publisher
- University of Wisconsin Press
- Published
- 2005
- Volume
- XL
- Issue
- 1
- Pages
- 1-30
- ISSN
- 0022-166X (ISSN-L)
- 1548-8004
- OpenAlex
- W2273906514
- Cited by
- 135
- References
- 1
- Citations by year
- 2026: 4 · 2025: 4 · 2024: 4 · 2023: 6 · 2022: 15 · 2021: 11 · 2020: 8 · 2019: 9 · 2018: 6 · 2017: 13 · 2016: 8 · 2015: 4 · 2014: 4 · 2013: 5 · 2012: 2
- FWCI
- 17.00
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Journal of Human Resources (publishedVersion)
- Topics
- Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Social Sciences › Sociology and Political Science › Intergenerational and Educational Inequality Studies
- Keywords
- racial wealth gap, permanent income, demographic differences, intergenerational transfers, sibling comparison, saving behavior
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