presentations due in 10 hours (X2)

Accelerat ing t he world's research.

Wealth Inequality in Black and White: Cultural and Structural Sources of the Racial Wealth Gap

Cedric Herring

Wealth Inequality in Black and White: Cultural and Structural Sources of the Racial Wealth Gap

Cite this paper

Get the citation in MLA, APA, or Chicago styles

Downloaded f rom Academia.edu 

Related papers

2003, Educat ion Foundat ion, Dissert at ion of James E Curt is, Jr igri jecjef universit y.org

Racial dif f erences in risky asset ownership: A t wo- st age model of t he invest ment decision- making pr… Michael Gut t er

T he Evolut ion of t he New Black Middle Class Bart Landry

Download a PDF Pack of t he best relat ed papers 

1 23

Race and Social Problems ISSN 1867-1748 Volume 8 Number 1 Race Soc Probl (2016) 8:4-17 DOI 10.1007/s12552-016-9159-8

Wealth Inequality in Black and White: Cultural and Structural Sources of the Racial Wealth Gap

Cedric Herring & Loren Henderson

Wealth Inequality in Black and White: Cultural and Structural

Sources of the Racial Wealth Gap

Cedric Herring 1

• Loren Henderson 1

Published online: 10 February 2016 � Springer Science+Business Media New York 2016

Abstract Using data from the 2013 Survey of Consumer

Finances, this research examines competing and comple-

mentary cultural and structural explanations of the sources

of racial differences in wealth. We use OLS regression and

quantile regression to identify the major individual-level

sources of wealth differences between African Americans

and whites. Whites have more favorable wealth charac-

teristics than do African Americans on all of the variables

in the analysis: gender of household head, bankruptcies,

spending patterns, stock ownership, business ownership,

home ownership, inheritance, educational attainment,

income, occupation, age, and number of children. Cultural

factors, having a female-headed family, spending patterns,

and inheritance account for little of the racial wealth gap.

Racial differences in income, stock ownership, and busi-

ness ownership account for much of the explained racial

wealth gap. Moreover, compared with whites, African

Americans receive significantly lower wealth returns to

education, age, income, stock ownership, and business

ownership. We discuss the implications of our findings.

Keywords Racial inequality � Wealth inequality � Racial

wealth gap � Net worth and race

Several studies have documented racial and ethnic differ-

ences in wealth ownership (Parcel 1982; Horton 1992;

Oliver and Shapiro 2006; Lewin-Epstein et al. 1997;

Conley 1999; Keister 2000a, b; Avery and Rendall 2002;

Shapiro 2004; Semyonov and Lewin-Epstein 2011, 2013).

Although researchers agree that there are extreme and

persistent racial differences in wealth, the reality of the

ever-increasing wealth gap in the USA has spawned

scholarly debates about the root causes of this phenomenon

(e.g., Massey and Denton 1993; Oliver and Shapiro 1995;

Conley 1999; Keister and Moller 2000; Shapiro et al. 2013;

Sullivan et al. 2015). Indeed, there are now competing

explanations in the ‘‘race-class’’ debate concerning wealth

accumulation and inequality. Some scholars have taken the

view that racial differences in wealth are primarily the

result of differences in cultural and behavioral factors such

as familial patterns, amounts of self-control, willingness to

delay gratification, and investment and consumption pat-

terns (e.g., Lewis 1963; Wilson 1987; Brimmer 1988;

Keister and Moller 2000; Lawrence 1991; Altonji and

Doraszelski 2005; Charles et al. 2009). Others focus on

historical and contemporary structural factors and unequal

ownership opportunities as the primary determinants of

black–white wealth inequality (e.g., Oliver and Shapiro

1995; Conley 1999, 2001; Neckerman and Torche 2007;

Sullivan et al. 2015).

Competing and complementary theories identify several

factors that may help account for racial differences in

wealth in the USA. This paper provides an examination of

several social science theories that seek to explain racial

disparities in wealth. Using data from the 2013 Survey of

Consumer Finances, it looks at the relative contribution of

contemporary cultural factors (e.g., family structure and

spending patterns), structural factors (e.g., housing own-

ership and business ownership), human capital (e.g., edu-

cational attainment), and investment decisions (e.g.,

ownership of stocks). Guided by these social science

explanations of racial wealth inequality, we use nationally

& Cedric Herring [email protected]

Loren Henderson [email protected]

1 University of Maryland, Baltimore County, Baltimore, MD, USA

123

Race Soc Probl (2016) 8:4–17

DOI 10.1007/s12552-016-9159-8

Author's personal copy

representative data from the 2013 Survey of Consumer

Finances to carry out regression analysis to identify the

major individual-level sources of wealth differences

between African Americans and whites. We attempt to

show which factors identified by the cultural and behav-

ioral literature, the literature that focuses on structural and

unequal ownership opportunities, as well as those that

identify other sociodemographic and human capital vari-

ables operate differently for African Americans and whites.

Below, we provide a brief overview of those literatures.

Review of the Literature

Cultural and Behavioral Explanations of the Racial

Wealth Gap

Cultural and behavioral explanations of the racial wealth

gap often argue that wealth differentials result from one or

more cultural traits of African Americans. The emphasis is

on family arrangements, attitudes, and values rather than

social structure, although the two types of factors are often

linked together in these models. Scholars in this tradition

argue that racial wealth inequality is the result of differ-

ences in cultural factors such as lack of self-control, the

unwillingness to delay gratification, and problematic con-

sumption patterns (e.g., Lewis 1963; Galenson 1972;

Wilson 1987; Brimmer 1988; Lawrence 1991; Szydlik

2004). The ‘‘culture of poverty thesis,’’ for example, argues

that the lack of wealth (i.e., poverty) is caused by cultural

and behavioral practices that are antithetical to wealth

accumulation (Frazier 1957; Lewis 1963; Banfield 1974;

Brimmer 1988; Charles et al. 2009). Cultural explanations

of economic inequality also often view the lack of wealth

as a result of cultural pathology. Frazier (1957), for

example, attempted to explain why seemingly affluent

African Americans continued to lag behind whites. He

argued that affluent African Americans—who he dubbed

the black bourgeoisie—developed a serious inferiority

complex due to their continued exposure to white racism

and ideology. He contended that the black bourgeoisie

lived in a world of make believe that insulated them from

their internalized realization that they were inferior to

whites in the market place and in society overall. This

world of make believe included extreme partying, gam-

bling, sex, and lavish spending on such things as houses,

cars, and clothes. These behaviors masked the reality that

they had less wealth and access to the polity than they

deserved. These behavioral patterns supposedly also stun-

ted the economic prosperity of African Americans in the

middle class. Frazier (1957) further characterized African

Americans as conspicuous consumers who engaged in

excessive spending on frivolous items. Frazier (1957)

ultimately argued that economic and other types of

inequality were a result of middle-class African Ameri-

cans’ pathological behavior and self-hating desire to be

white.

There are more recent explanations of the racial wealth

gap that also focus on problematic conspicuous consump-

tion and lavish spending by African Americans (Charles

et al. 2009). Under the conspicuous consumption thesis,

individuals will purchase goods and services that are not

needed. This will result in a lack of financial assets. This

argument is used to help explain the wealth gap between

African Americans and whites by asserting that African

Americans spend their money frivolously and fail to invest

in income-generating assets (Brimmer 1988). While con-

sumption patterns are not enough to account for the wealth

gap between blacks and whites (Hamilton and Darity

2010), it is still important to examine such factors as

contributors to the racial wealth gap.

Another kind of cultural theory of racial wealth dis-

parities focuses on racial differences in family structure

and family background (Wilson 1987; Keister 2004).

Keister (2004) suggests that racial differences in family

structure are important to explaining the black–white

wealth gap. One of her central claims is that family

structure and family background are important determi-

nants of wealth. Moreover, because family structures differ

by race in the USA, racial disparities in adult wealth

accumulation are a function of dissimilarities in family

type and resources. Moreover, Keister (2004) argues that

female-headed households are disadvantaged compared to

two-parent (i.e., husband wife coupled) households

because women continue to work in segregated labor

markets, earn less than men, and have more difficulty

securing resources that translate into income-generating

assets. She shows that married couples have more wealth

than do other households. Similarly, Wilson (1987) argues

that the female-headed household is one factor related to

poverty. Other scholars also support the claim that married

couples are more likely to own homes, have higher housing

values, and have greater wealth compared with other

family types. Married couples have distinct advantages in

wealth accumulation over other family types because they

have the potential for dual earners. However, there is also a

distinct gender dynamic that occurs. African American

women, in particular, have especially low amounts of

wealth (Brown 2012). Even when there is only one earner

in the married family, these households earn more than

female-headed households. Yet, when married couples

send the wife into the workforce, their wealth lags behind

those families that send only the husband into the work-

force. This is directly related to gender inequality in the

labor market.

Race Soc Probl (2016) 8:4–17 5

123

Author's personal copy

In short, cultural and behavioral explanations of racial

differences in wealth have in common the idea that African

Americans do worse than white Americans because of

some cultural deficiency or shortcoming among African

Americans. These explanations place far less emphasis on

structural and opportunity-related factors that might

account for racial differences in wealth.

Structural and Unequal Ownership Opportunity

Explanations of the Racial Wealth Gap

In contrast to the view that African Americans’ patholog-

ical behaviors as the major contributing factors to eco-

nomic inequality, proponents of structural and unequal

ownership opportunity explanations point to discriminatory

practices and racialized policies in labor markets, housing

markets, and credit markets as key sources of racial wealth

disparities. Such discriminatory practices and policies have

created generational consequences that continue to impact

African Americans today (e.g., inherited poverty). Histor-

ically, whites have been more able than African Americans

to secure wealth in the form of businesses, homes, and

stocks because of governmental policies that favored

whites. African Americans were, by and large, denied the

opportunity to acquire and pass down accumulated wealth

until the 1960s.

Lower wages and incomes are also related to the wealth

gap between whites and African Americans (Conley 1999).

These lower wages and incomes are, in part, products of

labor market discrimination and unequal returns to human

capital characteristics such as education. Moreover, such

discrimination in labor markets accumulates over the life

course (Thomas et al. 1994). ‘‘Blacks have had much less

opportunity than whites to earn, save, or to inherit wealth.

Because of this historical legacy, black families have had

few opportunities to accumulate wealth and to pass it on to

their descendants’’ (Brimmer 1988:153).

One important way that wealth is acquired and trans-

ferred from generation to generation is through home

ownership (Conley 1999; Keister 2000a, b; Avery and

Rendall 2002; Campbell and Kaufman 2006). Home

ownership continues to be a significant source of wealth for

most people in the USA (Wolff 1995; Ratcliff and Maurer

1995; Keister 2000a, b; Shapiro et al. 2013; Sullivan et al.

2015). Unfortunately, however, discrimination in housing

markets and home financing are also major factors con-

tributing to racial wealth inequality (Massey and Denton

1993). African Americans are often denied housing loans

in locations that would allow them to acquire housing that

appreciates at the same rate as for whites. Thus, housing in

racially segregated housing markets is a leading cause of

racial inequality in the USA. because equity in housing

represents a substantial portion of most people’s wealth.

This results in gaps in wealth holdings between African

Americans and whites (Rugh and Massey 2010).

‘‘Redlining’’ is another important reason for the racial

wealth gap. ‘‘Redlining is a process by which goods or

services are made unavailable, or are available only on less

than favorable terms, to people because of where they live

regardless of their relevant objective characteristic’’

(Squires 1992:2). Prior to the Civil Rights Act of 1964,

‘‘fewer than 1 % of all mortgages in the nation were issued

to African Americans’’ (Kirp et al. 1995:7). This was a

consequence of redlining practices supported by the US

government. This injurious practice restricted African

Americans’ full participation in the housing market (Mas-

sey and Denton 1993). In a similar vein, restrictive cove-

nants—‘‘contractual agreements among property owners

stating that they would not permit a black to own, occupy,

or lease their property … signing the covenant bound

themselves and their heirs to exclude blacks from the

covered area for a specific period of time’’ (Massey and

Denton 1993:36)—made it nearly impossible for blacks to

acquire home financing through the Federal Housing

Administration (FHA) (Massey and Denton 1993; Conley

1999; Lipsitz 2006).

Despite current federal laws prohibiting discrimination

in housing, disparities remain (Lipsitz 2006). These dis-

criminatory practices continue to restrict the ability of

blacks at all income levels to leverage their resources in

order to dramatically reduce the disparity in wealth (Oliver

and Shapiro 1995). Once the housing bubble burst in the

mid-2000s, it had a greater impact on African American

households (Taylor et al. 2011). Black households lost

53 % of their wealth compared with whites who lost 16 %

because blacks were ‘‘more dependent on home equity as a

source of wealth’’ (Taylor et al. 2011:7). Relatedly, Shapiro

(2006) suggests that subprime lending became the new

redlining. He argues that banks systematically targeted

African Americans through ‘‘objective’’ criteria such as

credit scores to offer them subprime loans. These loans

often had higher fees, interest, penalties, and were, there-

fore, more difficult to fulfill (Shapiro 2006; Henderson

et al. 2015). Many African Americans were able to pur-

chase their first home with such contracts; unfortunately,

many of these loans resulted in African Americans falling

further into debt, foreclosure, and wealth depletion.

Another, often overlooked structural source of racial

differences in wealth is business ownership. In a survey of

affluent Americans (i.e., with incomes over $100,000),

70 % of those with at least $3 million in assets had

acquired the bulk of their wealth through business owner-

ship (US Trust 2013). In addition, net worth is greater for

white business owners than for other demographic groups

(Butler and Herring 1991; Cavalluzzo and Wolken 2002).

For example, in 1998 the mean (median) value of net worth

6 Race Soc Probl (2016) 8:4–17

123

Author's personal copy

was $687,719 ($150,000) for white business owners com-

pared to $159,962 ($80,000) for African American busi-

ness owners (Cavalluzzo and Wolken 2002). Moreover,

whites are significantly more likely to be business owners

than are African Americans (Butler and Herring 1991;

Bates 2006). Combined, these factors suggest that racial

differences in business ownership may also provide a

potential explanation of the racial wealth gap.

According to this unequal ownership opportunity

framework, African Americans have also been dispropor-

tionately denied access to loans for business development

by banks (Conley 1999). Whites, on the other hand, were

provided low-interest loans and access to wealth-generat-

ing banking options (Conley 1999). African Americans

have historically engaged in entrepreneurial activities

(Butler and Herring 1991; Graham 2000); however, as

Butler (1991) suggests, African Americans engaged in

what he called the economic detour model of economic

development. By this, he means that they could not conduct

business in non-black communities. Not only were African

Americans forbidden from entering the traditional work-

force without being discriminated against, they were also

forced to endure discrimination in their business operations

(Butler 1991). Such practices have contributed to racial

disparities in business ownership and wealth inequality.

Is It Cultural, Structural, or a Little of Both?

Thus far, this paper has focused on cultural and structural

frameworks that seek to explain the continued racial wealth

gap. However, cultural and structural explanations of

wealth inequality are not mutually exclusive. Indeed, some

factors like inheritance and intergenerational wealth

transfers are incorporated into both types of explanations in

different fashions. This point is illustrated in qualitative

works such as Johnson’s (2014) The American Dream and

the Power of Wealth. Johnson (2014) shows how beliefs in

meritocracy and opportunity not only serve to gloss over

educational inequality, but more significantly, serve to

reproduce racial wealth inequality. She shows how meri-

tocratic ideology is passed down from one generation to the

next. In doing so, she explores the paradoxical beliefs of

sympathetic Americans who agree with the ideal of hard

work while reaping the benefits of unearned privilege. Her

interviews with affluent children reveal that they have

several similarities with their parents. They hold views of

inequality that, while proclaiming a commitment to hard

work and equal opportunity, really exhibit stereotyped and

racially tinged views of the poor and demonstrate an

unawareness of the centrality of inherited advantages. So,

while much of privilege and disadvantage of wealth is

inherited and passed along from generation to generation,

so too are cultural beliefs and values that prop us such

differences in wealth.

Explanations do not always fit neatly within cultural or

structural categories. In particular, consumption, invest-

ment, and inheritance patterns have both cultural and

structural elements. There are other sociodemographic, life

cycle, and human capital factors that may play a central

role in explaining the racial wealth gap. This section

reviews these factors and discusses other social forces that

are not typically linked to the racial wealth gap debate.

Age and the Life Cycle

Age is not usually associated with the racial wealth gap

debate. However, life cycle approaches can offer powerful

insights into racial differences in wealth. The life cycle

model can help identify critical events in people’s lives that

have consequences for their ability to accumulate wealth.

For example, racial differences in parents’ ability to pay for

college education for their children will have lifelong

effects on wealth accumulation. Those whose parents

cannot or do not pay are likely to be saddled with student

loans that exceed their ability to repay them if they are able

to go to college at all (Shapiro 2004). Similarly, whites are

more likely than are African Americans at crucial points in

their lives (e.g., when marrying or buying a home) to

receive substantial wealth transfers from family members

in the form of no interest loans or cash (Shapiro 2004).

There are also racial differences in health status, morbidity,

mortality, and life expectancy that have implications for

wealth accumulation. And once people reach retirement,

they deplete assets and lower their overall wealth (Ando

and Modigliani 1963; Rhee 2013; National Institute on

Aging and National Institutes of Health 2015). The life

course approach does not fully account for findings that

show differential patterns of accumulation and depletion of

wealth over the life cycle for different racial groups

(Keister and Moller 2000). Still, it calls attention to the

possibility that age and other life course forces can play

central roles in racial disparities in wealth.

Chiteji (2010) also provides a life cycle explanation of

racial wealth inequality. She argues that African Americans

are systematically disadvantaged in credit markets com-

pared with their white counterparts. The practice of

charging African Americans higher interest has resulted in

lower wealth transfers and decreased ability to accumulate

wealth throughout the life course.

Finally, Herring et al. (2013) put forth evidence in

support of a ‘‘cumulative effects of discrimination’’ model,

which claims that the black–white wealth gap increases

over the life course for each historical period. They pro-

pose that younger African Americans have always done

better than older African Americans when compared with

Race Soc Probl (2016) 8:4–17 7

123

Author's personal copy

similar whites because the negative impact of discrimina-

tion is cumulative over the life course. In other words, the

effects of race on disparities in wealth accumulate over the

life course and lead African Americans to have a cumu-

lative disadvantage in wealth.

Investments

Oliver and Shapiro (1995) show that at lower income

levels, African Americans spend relatively more than

whites on housing and transportation rather than income-

producing assets. However, such spending is a conse-

quence of home mortgage discrimination and the need for

many African Americans to purchase reliable cars in order

to commute longer distances to work because of labor

market segregation that locates their jobs longer distances

from their homes. Oliver and Shapiro (1995) also show that

at higher income levels, African Americans save more

while whites invest in more wealth-generating instruments.

Brimmer (1988) argues that the investment patterns of

African Americans reflect risk aversion and lack of

familiarity with the stock market. These different behaviors

are related to differences in social networks and connec-

tions that affect amounts and types of information about the

inner workings of the stock market. He argues that the lack

of useful information about investment strategies lead to

very different asset holdings between African Americans

and whites.

Similarly, at the time of the Great Recession, African

Americans lost 71 % of their investments compared with a

9 % loss of stock investments for whites (Taylor et al.

2011). Even more, ‘‘since the official end of the recession

in mid-2009, the housing market in the USA has remained

in a slump while the stock market has recaptured much of

the value it lost from 2007 to 2009. Given that a much

higher share of whites than blacks or Hispanics own

stocks—as well as mutual funds and 401(k) or individual

retirement accounts (IRAs)—the stock market rebound

since 2009 is likely to have benefited white households

more than minority households’’ (Taylor et al. 2011:5).

Thus, it is likely that investment patterns play a role in the

racial wealth gap.

While there is little evidence of different savings rates

between African Americans and whites at similar income

levels (Gittleman and Wolff 2004), whites generally have

greater savings, and thus, they may be more likely to use

these savings to invest in the market (Brimmer 1988).

Brimmer (1988) suggests that as African Americans begin

to invest more often in the stock market and develop cul-

tural capital to share with others in their communities, their

involvement and share of the market will increase.

Although Brimmer (1988) considers some structural fac-

tors, his arguments about risk-taking and family structure

are primarily cultural inasmuch as they invoke personal

responsibility and choice as the major factors related to the

black–white wealth gap. Oliver and Shapiro (1995) suggest

that although there are differences in investment strategies

between African Americans and whites, these strategies

reflect structural barriers for some groups and privileges for

others rather than cultural patterns that demonstrate

pathology or cultural competence.

Inheritance and Intergenerational Wealth Transfers

Inheritance and intergenerational wealth transfer have also

been viewed as central sources of the racial wealth gap

(Oliver and Shapiro 1995; Conley 1999; Darity et al. 2001;

Semyonov and Lewin-Epstein 2001; Gittleman and Wolff

2004; Shapiro 2004). Inheritance creates and maintains

social inequality (Szydlik 2004); still, African Americans

have less wealth, in part, because of their lower intergen-

erational transfers of wealth (Smith 1995). Oliver and

Shapiro (1995) argue that, through inheritance, the children

of whites and blacks chart very different economic courses.

Through inheritance and wealth transfers, white families

pass on more than money. They also transfer class and

racial privileges, as well as disadvantages from one gen-

eration to another (Shapiro 2004). ‘‘Blacks received 8 cents

of inheritance for every dollar inherited by whites’’ (Sha-

piro 2004:69). Yet, it is still important to analyze wealth

transfers between living parties because as much as 43 %

of all wealth may be transferred while both parties are

living (Shapiro 2004). Shapiro also documented that

‘‘28 % of whites received bequests, compared to just 7.7 %

of black families’’ (p. 69). In part, this can be explained by

the lower asset holdings of African Americans that make

intergenerational wealth transfers less possible; however,

this does not fully account for the racial wealth gap nor

does it fully explain why African Americans provide lower

amounts of inheritance to their children (Smith 1995).

Shapiro (2004) indicated that many whites acknowledge

that they receive substantial wealth transfers from their

family members in the form of low or no interest loans,

cash, and college tuition. Yet, these beneficiaries continued

to proclaim that they had earned their wealth through their

own hard work and canny investment strategies. They were

blind to the link between their unearned wealth and the

standing of others in the social hierarchy (Shapiro 2004).

This list of factors is not exhaustive. It does not include

the impact of residential segregation, discriminatory credit

markets, nor macroeconomic factors that go beyond the

individual. It does, however, include most of the major

individual-level factors put forth by social science theories

of wealth that are available for analysis in the 2013 Survey

of Consumer Finances. Below, we provide an analysis that

includes factors consistent with the competing and

8 Race Soc Probl (2016) 8:4–17

123

Author's personal copy

complementary explanations of the racial wealth gap. First,

however, we provide more details about the data and our

analysis strategy.

Data, Methods and Analysis Strategy

The Sample

The 2013 Survey of Consumer Finances (SCF) is a

nationally representative survey sponsored by the Federal

Reserve Board that collects information on US families’

wealth, incomes, and demographic characteristics (Bricker

et al. 2014). To ensure the representativeness of the study,

respondents were selected using two techniques for random

sampling: First, a geographically based random sample

(multistage area-probability) was selected to provide cov-

erage of characteristics that are broadly distributed in the

population. Second, a supplementary (list) sample that

disproportionately includes wealthy families was drawn

from records derived from tax returns (Bricker et al.

2014:38). Only individuals listed as being among the

wealthiest 400 people in the USA were excluded from

sampling. The response rate for the area-probability sample

was 70 %, and the response rate for the list sample was

30 %. The Survey of Consumer Finances is ‘‘a unique data

set that provides highly accurate information on cross

sections of top income earners and wealth owners’’ (Keister

2014:350). The analysis is based on the 4271 white and

African American respondents for whom wealth (net

worth), race, and other variables in the analysis were

available. The list of variables and their operationalizations

used in the analysis are presented in Table 1.

Analysis Strategy

In order to examine racial differences in wealth in a mul-

tivariate context, we used Stata 13.0 to carry out three

different analytical strategies: (1) ordinary least squares

(OLS) regression analysis and (2) quantile regression

analysis. The dependent variable is wealth or net worth.

The central independent variable is race. In addition, the

multivariate models take into consideration gender of

household head, bankruptcies, spending patterns, stock

ownership, business ownership, home ownership, inheri-

tance, educational attainment, income, occupation, age,

and number of children. We report results based on median

and mean wealth. Because the SCF had a complex sam-

pling design, we used the svyset command within Stata to

appropriately weight the data. Also, because the data file

contains multiply imputed values, we used the mim sub-

routine and the micombine command.

Multivariate Analysis: Ordinary Least Squares Regression

and Quantile Regression

In ordinary least squares (OLS), the primary goal is to

determine the conditional mean of random variable Y,

given some explanatory variable xi, reaching the expected

value E[Y|xi]. Frequently, however, error terms are not

constant across a distribution and thereby violate the

assumption of homoscedasticity. Also, by focusing on the

mean as a measure of central tendency, information about

the tails of a distribution is lost. Finally, OLS is sensitive to

extreme outliers, which can distort the results significantly.

Quantile regression overcomes some of the problems

associated with OLS regression when assumptions about

homoscedasticity are violated. In particular, one major

advantage of quantile regression relative to OLS regression

is that quantile regression estimates are more robust against

outliers in the dependent variable because the median—a

commonly used quantile—is far less sensitive to extreme

values. Another advantage is that quantile regression

allows for more comprehensive analysis of the relationship

between variables because it also estimates multiple rates

of change (slopes) from the minimum to maximum

response, and thus providing a more complete picture of

the relationships between variables missed by other

regression methods (Koenker and Gilbert 1978).

Ordinary least squares (OLS) linear regression estimates

the conditional mean function E(Yi|xi) with a linear pre-

dictor x0ib. In contrast, quantile regression estimates the sth

conditional quantile function Qs(Yi|xi) with a different lin-

ear predictor x0ib(s), where the quantile level s ranges

between 0 and 1. If the data are heteroscedastic—as is

typically the case with wealth—the median regression

estimators used in quantile regression are more efficient

than mean regression estimators, and quantiles are robust

with respect to outliers (Koenker and Gilbert 1978).

However, because mean regression gives a sense of the

dispersion of wealth and the degree to which very high (or

very low) values influence disparities, we also include

analysis based on OLS regression.

Because the OLS regressions and quantile regressions

show different things about wealth, we include both. The

OLS (mean) regression gives a sense of the dispersion of

wealth and the degree to which very high (or very low)

values influence disparities. This allows us to look at

average black–white wealth differences at any point in the

wealth distribution. Quantile (median) regression estimates

the median, a more common indicator of central tendency

in studies of wealth. Median regression estimators have

useful properties when data are skewed, but they also mask

the magnitude of differences, especially between groups

because they give the same computational weight to

Race Soc Probl (2016) 8:4–17 9

123

Author's personal copy

‘‘typical’’ values and ‘‘extreme’’ values. However, a given

value (e.g., $150,000) that might be considered extreme for

one racial group (e.g., median wealth for African Ameri-

cans is $8935) might be fairly typical for another racial

group (e.g., median wealth for whites is $143,000). Pre-

senting results from both OLS and quantile regression, as

we do, makes it possible to examine both typical wealth

amounts for racial groups and racial disparities in wealth.

Finally, we use interaction terms between race and each

independent variable in the analysis. Doing so makes it

possible to estimate how much each such factor helps

account for the wealth gap between African Americans and

whites. The central question is how much of the wealth

difference can be accounted for by racial differences in the

predictors.

Results

Summary Statistics

Figure 1 presents mean and median wealth (net worth) by

race. It shows that the median wealth for whites was

$143,000 in 2013. This compares with $8935 for African

Americans. As substantial as this gap is ($134,065), it pales

in comparison with the mean racial wealth gap ($325,125).

Although use of the median rather than the mean provides

robustness against outliers in the wealth distribution,

arguably, it conceals as much as it illuminates because it

does not provide much information about just how skewed

the wealth distribution is.

If wealth were normally distributed, the skew would

equal 0. Panel A of Fig. 2 shows that the overall wealth

data are positively skewed (skew = 1.20). As Panel B

shows, for whites wealth is somewhat less positively

skewed (skew = .99) than for the overall distribution.

Among African Americans, wealth is substantially more

positively skewed (skew = 5.62). This suggests that the

mean wealth of African Americans is even more affected

by influential cases of very wealthy respondents than is the

mean wealth of whites.

Table 2 presents selected characteristics of African

Americans compared with whites. This table shows that

whites have more favorable wealth characteristics than do

African Americans on all of the variables in the analysis:

family structure, bankruptcies, spending patterns, stock

ownership, business ownership, home ownership, inheri-

tance, educational attainment, income, occupation, age,

and number of children. There are statistically significant

differences between whites and African Americans on all

of these variables. In short, there are several cultural,

behavioral, structural, ownership opportunity,

Table 1 List of variables and operationalizations used in the analysis

Variable Operationalizations

Wealth/net worth (-$-227,019 to $3,000,000)

Respondent’s difference between assets and debt in 2013 dollars

Race (black = 1; white = 0) Respondent’s race/ethnicity: white, black/African American, American Indian, Alaska Native, Asian, Native Hawaiian or other Pacific Islander? Only respondents who reported that they are white or black were included in the analysis

Female-headed household (yes = 1)

Sex of head of household

Bankruptcy (yes = 1) Respondent reports household member has declared bankruptcy in the past 5 years

Excessive spending (yes = 1) Respondent reported that his/her spending exceeded his/her income

Stock ownership (yes = 1) Respondent reports household member has shares of stock

Business ownership (yes = 1) Respondent reports household member has an active or non-actively managed business(es)

Home ownership (yes = 1) Respondent reports household member owns a house, ranch, farm, mobile home, condo, or coop

Inheritance (yes = 1) Respondent reports household member received an inheritance

Educational attainment Respondent’s highest completed grade/level of school or college

Bottom 20 % of income distribution (yes = 1)

Respondent’s total family income falls within the bottom 20 % of the income distribution

Top 20 % of income distribution (yes = 1)

Respondent’s total family income falls within the top 20 % of the income distribution

Professional/managerial occupation (yes = 1)

Respondent’s occupation is a professional or managerial one

Age (18–95) Respondent’s age

Number of children (0-8) Respondent’s number of children in household

10 Race Soc Probl (2016) 8:4–17

123

Author's personal copy

Fig. 1 Mean and median net worth by race

Fig. 2 Distribution of wealth by race

Race Soc Probl (2016) 8:4–17 11

123

Author's personal copy

sociodemographic, and human capital differences between

African Americans and whites that should be taken into

consideration when making comparisons between their

levels of net worth. Our multivariate analysis takes such

factors into consideration.

Table 3 presents results from both an OLS regression

model (mean) and a quantile regression model (median)

predicting wealth with race, net of the other wealth-related

factors. Model 1 (the OLS regression) shows that, when

controlling for other factors, there was a net mean racial

wealth gap of more than $41,000 (p\ .001). Some ana-

lysts believe that the magnitude of discrimination is much

bigger than the race coefficients effect itself because even

differences in other traits, characteristics, and credentials

may be the result of racial discrimination. For example, it

is possible that African Americans were discouraged from

Table 2 Selected characteristics of respondents by race

Variable Whites Blacks Overall

Median net worth $143,000 $8935*** $98,200

Mean net worth $404,563 $79,438*** $348,536

% with female-headed household 24.9 50.2*** 29.3

% with bankruptcy 3.8 6.2*** 4.2

% with excess spending 13.3 20.2*** 14.5

% with stock ownership 17.2 3.3*** 14.8

% with business ownership 13.7 6.3*** 12.4

% with home ownership 73.1 44.0*** 68.1

% with inheritance 26.6 10.4*** 23.8

Mean educational attainment 13.8 13.1*** 13.7

% in bottom 20 % of income distribution 16.3 33.3*** 19.2

% in top 20 % of income distribution 24.2 7.5*** 21.3

% with professional occupation 30.7 23.2*** 29.4

Mean age 53.1 48.8*** 52.3

Mean number of children 0.7 1.0*** 0.7

N 3535 736 4271

* p\ .05; ** p\ .01; *** p\ .001

Table 3 OLS and simultaneous quantile regression models predicting net worth with race, net of cultural and behavioral factors, structural and ownership opportunity factors, sociodemographic and human capital factors, and other factors

Independent variables Model 1 Mean wealth

Model 2 Median wealth

OLS regression Quantile regression

Black -41.02*** -17.27***

Female-headed family -39.26*** -13.82***

Bankruptcy -99.34*** -45.23***

Excess spending -32.39*** -19.67***

Stock ownership 240.9*** 263.3***

Business ownership 229.8*** 223.6***

Home ownership 85.77*** 72.40***

Inheritance 117.9*** 48.26***

Educational attainment 24.70*** 8.433***

Bottom 20 % of income distribution -41.34*** -21.25***

Top 20 % of income distribution 339.7*** 342.5***

Professional/manager 23.32*** 7.204**

Age 5.960*** 2.262***

Number of children -5.933* -1.698

Constant -549.1*** -17.27***

N 4271 4271

Adjusted R 2 /pseudo-R

2 .417*** .262***

* p\ .05; ** p\ .01; *** p\ .001

12 Race Soc Probl (2016) 8:4–17

123

Author's personal copy

pursuing higher education, business ownership, home

ownership, etc., due to existing discriminatory barriers,

Therefore, those who believe in widespread discrimination

in society may argue that the race coefficient underesti-

mates the magnitude of discrimination; hence, gross wealth

disparities may be an outcome of discrimination. Note that

other factors that are also significantly related to wealth

include gender of household head, bankruptcies, spending

habits, stock ownership, business ownership, home own-

ership, inheritance, educational attainment, income, occu-

pational status, age, and number of children. Combined,

these factors account for more than 45 % of the variance in

net worth. The results from the quantile regression (Model

2) show similar patterns (with the exception of occupa-

tional status and number of children). Here, however, the

net median racial gap is $17,267 when controlling for the

other factors. Again, however, it is possible the correlates

of wealth differ in how they are related to net worth for

African Americans and whites.

Table 4 illustrates this point by providing a stratified

analysis. Model 1 predicts median wealth among African

Americans with gender of household head, bankruptcy sta-

tus, spending habits, stock ownership, business ownership,

home ownership, inheritance, educational attainment,

income, professional-managerial status, age, and number of

children. Model 2 predicts median wealth among whites with

the same factors. A comparison of the models, however,

suggests that these variables operate very differently for

African Americans and whites. In particular, being a stock

owner is associated with a $245,000 increase in wealth for

whites, but a $16,154 increase in wealth for African Amer-

icans. Similarly, business ownership is associated with a

$252,100 increase in wealth for whites, but a $84,523

increase in wealth for African Americans. And being among

the top income earners is associated with $348,400 in wealth

for whites, but $124,350 for African Americans.

Why do such massive racial gaps in wealth occur?

Table 5 presents the results from a model that interacts race

with each of the independent variables in the analysis.

Significant interaction terms indicate that wealth is related

to a variable of interest in a fashion that is different for

African Americans and whites. The results in Table 5

suggest that every variable in the analysis is related to

wealth differently for African Americans and whites. The

model shows that, net of all the factors and interactions in

the model, African Americans average $156,115 less

wealth than comparable whites. In other words, if African

Americans had the same characteristics as whites, there

would still be a wealth gap of more than $150,000. For ease

of interpretation of the interactions, Fig. 3 presents the

wealth gaps for each variable in the analysis. By holding

constant all other factors in the analysis, we estimate the

wealth of African Americans and whites for each variable.

We then subtract the value for African Americans from

whites to obtain the wealth gap for each variable. For

example, it shows that if African Americans and whites had

the same characteristics, African American and white stock

owners would still differ in wealth by an average of

$425,600. Similarly, African American and white business

owners would differ by an estimated $212,000.

Table 4 Simultaneous quantile regression models predicting net worth, stratified by race, net of cultural and behavioral factors, structural and ownership opportunity factors, sociodemographic and human capital factors, and other factors

Independent variables Model 1 Median wealth

Model 2 Median wealth

African Americans Whites

Female-headed family 1.217 -24.74***

Bankruptcy -7.046*** -62.77***

Excess spending -4.041*** -28.69***

Stock ownership 16.15 245.0***

Business ownership 84.52*** 252.1***

Home ownership 57.19*** 78.05***

Inheritance 8.163* 59.67***

Educational attainment -.140 12.00***

Bottom 20 % of income distribution -9.969*** -36.05***

Top 20 % of income distribution 124.4*** 348.4***

Professional/manager .135 6.694

Age .320*** 3.176***

Number of children -.039 -5.755***

Constant -5.332 -261.0***

N 736 3535

Pseudo-R 2

.178*** .264***

* p\ .05; ** p\ .01; *** p\ .001

Race Soc Probl (2016) 8:4–17 13

123

Author's personal copy

Figure 3 provides some insight into the importance of

various cultural and behavioral factors, structural and

ownership opportunity variables, and sociodemographic

and human capital variables. These results suggest that if

African Americans and whites were the same on all char-

acteristics, blacks and whites who are in female-headed

households would differ by $112,300; African Americans

and whites with excessive spending behavior would differ

by $118,280; and African Americans and whites who have

experienced and bankruptcies would differ in wealth by

$54,000. If African Americans who received and inheri-

tance or wealth transfer were similar to whites on all

characteristics, they would still have $286,100 less in

wealth.

Figure 3 also shows that a sizeable portion of the racial

wealth gap is associated with differential returns to edu-

cation for African Americans and whites. A substantial

literature exists on the economic returns to education (e.g.,

Hoffman 1984; Thomas et al. 1996; Loury and Garman

2001; Sakamoto et al. 2006; Black et al. 2006). There are

several plausible explanations for the racial differences in

wealth for given levels of education. Thomas et al. (1996)

suggest that discrimination, especially in occupational

attainment and earnings determination in the labor market,

is central in racial and gender differences in returns to

education. Similarly, Oliver and Shapiro (1995) point out

that education is differentially related to wealth for blacks

and whites because white parents are more able to send

their children to private schools and colleges, which pro-

vide large salary premiums (Brewer et al. 1999). Sakamoto

et al. (2006) point to racial differences in fields of study

that yield differential rewards. Systematically understand-

ing the relative importance of these factors to differential

wealth returns to education for blacks and whites is an

important topic that should be the focus of future research

on racial disparities in wealth.

These results also show that the net racial wealth gap

grows over the life course ($179,400 at age 20 and

$268,200 by age 65). This is consistent with the idea of the

cumulative effects of discrimination on wealth over the life

course (Herring et al. 2013). As age increases, the wealth of

whites accumulates more rapidly than that of African

Americans.

The analysis also shows that the racial wealth gap

increases as income increases. The wealth gap between

African Americans and whites in the bottom income

quintile is $7400, but the wealth gap between comparable

African Americans and whites in the top income quintile is

$264,700.

What does this analysis tell us? As noted above, the

mean racial wealth gap (in Fig. 1) is $325,125. If African

Americans had the same levels of income, business own-

ership, stock ownership, and home ownership and other

characteristics as whites, the wealth gap would be cut in

half. However, the mean racial wealth gap would still be

more than $155,000. Generally, the results suggest that

cultural and behavioral factors explain less of the racial

wealth gap than structural and ownership opportunity

variables. Still, because of differential wealth returns to

education, aging, income, stock ownership, and business

ownership for whites and African Americans, much of the

racial wealth gap remains.

Discussion and Conclusions

This paper began with the observation that several studies

have documented racial differences in wealth as a key

determinant of advantage and privilege in America.

Informed by social science explanations of racial wealth

Table 5 OLS regression model predicting net worth with race and interaction terms, net of other factors

Independent variables Mean wealth

Black -156.115***

Female-headed family -44.3903***

Bankruptcy -137.779***

Excess spending -45.0136***

Stock ownership 271.578***

Business ownership 233.804***

Home ownership 87.128***

Inheritance 131.727***

Educational attainment -5.151***

Bottom 20 % of income distribution -109.163***

Top 20 % of income distribution 375.123***

Professional/manager 43.976***

Age 3.7442***

Number of children -33.583***

Black 9 female-headed family 47.84698***

Black 9 bankruptcy 103.223***

Black 9 excess spending 39.220***

Black 9 stock ownership -271.011***

Black 9 business ownership -56.564***

Black 9 home ownership -6.893***

Black 9 inheritance -132.299***

Black 9 educational attainment 12.081***

Black 9 bottom 20 % of income distribution 90.946***

Black 9 top 20 % of income distribution -110.090***

Black 9 professional/manager -32.112***

Black 9 age -1.974***

Black 9 number of children 26.368***

N 4271

Adjusted R 2

.556***

* p\ .05; ** p\ .01; *** p\ .001

14 Race Soc Probl (2016) 8:4–17

123

Author's personal copy

inequality, we used data from the 2013 Survey of Con-

sumer Finances to carry out OLS regression and quantile

regression to model mean and median wealth with race.

We also used interaction models to identify the major

individual-level sources of wealth differences between

African Americans and whites.

Even after taking into account several cultural and

behavioral factors, structural and ownership opportunity

variables, and sociodemographic and human capital factors

normally thought to explain wealth accumulation, massive

racial differences in wealth remain. Structural and owner-

ship opportunity variables are associated with much larger

portions of the racial wealth gap. However, even if African

Americans had the same characteristics on these variables

as whites, there would still be a racial wealth gap of more

than $155,000.

This paper has some limitations. In particular, with

cross-sectional data it is difficult to sort out which factors

are ‘‘causes’’ of wealth and which are the ‘‘results’’ of

wealth. For example, home ownership typically requires

certain minimum thresholds of wealth to acquire the

property; however, owning a home may also be a source of

wealth when a property generates rent, appreciates in

value, or as one gains more equity in it. The same can be

said of other variables in the analysis such as business

ownership, stock ownership, or even educational attain-

ment. Thus, no claims about causality are made in this

analysis.

Another limitation of the analysis is that it does not

contain comprehensive indicators for some of the critical

behavioral and cultural factors identified in the literature

(e.g., beliefs and attitudes about finances, information

about family of origin, etc.). Similarly, it is not possible in

this analysis to include many of the structural variables

identified by the literature. For instance, there are no

indicators of residential segregation, credit market dis-

crimination, labor market discrimination, nor other group-

level variables that may be important to explaining the

racial wealth gap. Still, the analysis does incorporate some

ownership opportunity factors (e.g., home ownership and

business ownership) referred to by some structural

explanations.

The racial wealth gap is more intransigent than other

forms of inequality. It tends to compound and accumulate

Fig. 3 Estimated racial wealth gap by selected characteristics

Race Soc Probl (2016) 8:4–17 15

123

Author's personal copy

over time and from generation to generation. It offers

security and protection to whites, but puts African Amer-

icans at risk. Racial wealth inequality is built into the

structure of American society. It operates in the normal

working relationships of institutions, and its perpetuation

requires only that people continue to do business as usual.

Its eradication requires much more than good will. It

requires active review of the assumptions and practices by

which American institutions operate.

Because of the cumulative nature of wealth and racial

disparities in wealth, we must be cognizant of past dis-

crimination that set current-day disparities in motion.

While the processes and mechanisms by which racial

wealth inequality operate may be difficult to discern, their

effects are be readily apparent. Such racial disparities in

wealth provide material goods, opportunities, resources,

services, and psychological satisfactions for whites, and

they serve to penalize African Americans by decreasing

their quality of life.

While these benefits are never distributed equally, racial

gaps in wealth are structured in such a way that they

compound the effects of past discrimination. As a conse-

quence, African Americans are much less likely than white

people to receive wealth from their parents or other rela-

tives to pay for college, to start a business or to make a

down payment on a home. As our analysis has shown, lack

of these wealth-building assets makes the prospects of

accumulating wealth a more precarious proposition;

therefore, it is not surprising that white families are more

likely to own homes than are African American families.

But it is more disquieting that business ownership, stock

ownership, and high income do not yield the same returns

in wealth to African Americans as they do for whites.

These appear to be some of the true sources of racial dif-

ferences in wealth.

Acknowledgments We would like to thank William ‘‘Sandy’’ Dar- ity, Hayward Derrick Horton, Lori L. Martin, Melvin Oliver, Moshe Semyonov, Thomas Shapiro, and Melvin Thomas for their comments and suggestions on various drafts. We would also like to thank the anonymous reviewers at Race and Social Problems who made con- structive suggestions that strengthened the paper. Finally, we are grateful to those who provided comments at a colloquium at the University of Illinois at Urbana-Champaign. Parts of this paper have been presented at the American Sociological Association Conference, the Association of Black Sociologists Conference, and a United Nations Conference on Poverty, Inequality, and Global Conflict.

References

Aging and National Institutes of Health. (2015). Growing older in America: The health and retirement study. Bethesda, MD: National Institute on Aging.

Altonji, J. G., & Doraszelski, U. (2005). The role of permanent income and demographics in black/white differences in wealth. Journal of Human Resources, 40(1), 1–30.

Ando, A., & Modigliani, F. (1963). The ‘‘life cycle’’ hypothesis of saving: Aggregate implications and tests. The American Eco- nomic Review, 53, 55–84.

Avery, R. B., & Rendall, M. S. (2002). Lifetime inheritance of three generations of whites and blacks. American Journal of Sociol- ogy, 107, 1300–1346.

Banfield, E. C. (1974). The unheavenly city revisited. Boston: Little, Brown.

Bates, T. (2006). The urban development potential of black-owned businesses. Journal of the American Planning Association, 72(2), 227–237.

Black, D., Haviland, A., Sanders, S., & Taylor, L. (2006). Why do minority men earn less? A study of wage differentials among the highly educated. The Review of Economics and Statistics, 88(2), 300–313.

Brewer, D. J., Eide, E., & Ehrenberg, R. G. (1999). Does it pay to attend an elite private college? Cross cohort evidence on the effects of college type on earnings. Journal of Human Resources, 34(1), 104–123.

Bricker, J., Dettling, L. J., Henriques, A., Hsu, J. W., Moore, K. B., Sabelhaus, J., et al. (2014). Changes in US family finances from 2010 to 2013: Evidence from the survey of consumer finances. Federal Reserve Bulletin, 100(4), 1–41.

Brimmer, A. F. (1988). Income, wealth, and investment behavior in the black community. American Economic Review, 78, 151–155.

Brown, T. (2012). The intersection and accumulation of racial and gender inequality: Black women’s wealth trajectories. Review of Black Political Economy, 39(2), 239–258.

Butler, J. S. (1991). Entrepreneurship and self-help among black Americans: A reconsideration of race and economics. Albany: State University of New York Press.

Butler, J. S., & Herring, C. (1991). Ethnicity and entrepreneurship in America: Toward an explanation of racial and ethnic group variations in self-employment. Sociological Perspectives, 34(1), 79–94.

Campbell, L. A., & Kaufman, R. L. (2006). Racial differences in household wealth: Beyond black and white. Research in Social Stratification and Mobility, 24(2), 131–152.

Cavalluzzo, K., & Wolken, J. (2002). Small business loan turndowns, personal wealth, and discrimination. The Journal of Business, 78(6), 2153–2178.

Charles, K. K., Hurst, E., & Roussanov, N. (2009). Conspicuous consumption and race. The Quarterly Journal of Economics, 124(2), 425–467.

Chiteji, N. S. (2010). The racial wealth gap and the borrower’s dilemma. Journal of Black Studies, 41(2), 351–366.

Conley, D. (1999). Being black, living in the red: Race, wealth, and social policy in America. Berkeley, CA: University of California Press.

Conley, D. (2001). Decomposing the black-white wealth gap: The role of parental resources, inheritance and investment dynamics. Sociological Inquiry, 71, 39–66.

Darity, W., Dietrich, J., & Guilkey, D. K. (2001). Persistent advantage or disadvantage?: Evidence in support of the intergenerational drag hypothesis. American Journal of Economics and Sociology, 60(2), 435–470.

Frazier, E. F. (1957). The black bourgeoisie. New York: Free Press Paperbacks.

Galenson, M. (1972). Do blacks save more? American Economic Review, 62, 211–216.

Gittleman, M., & Wolff, E. N. (2004). Racial differences in patterns of wealth accumulation. Journal of Human Resources, 39(1), 193–227.

Graham, L. O. (2000). Our kind of people: Inside America’s black upper class. New York: Harper Perennial.

Hamilton, D., & Darity, W. (2010). Can ‘baby bonds’ eliminate the racial wealth gap in putative post-racial America? Review of Black Political Economy, 37, 207–216.

16 Race Soc Probl (2016) 8:4–17

123

Author's personal copy

Henderson, L., Herring, C., Horton, H. D., & Thomas, M. (2015). Credit where credit is due? Race, gender, and discrimination in the credit scores of business startups. The Review of Black Political Economy, 42, 459–479.

Herring, C., Semyonov, M., Horton, H. D., & Thomas, M. (2013). Race and the journey to wealth: Racial differences in net worth over the life course, 1989–2009. In Paper presented at the annual meeting of the American Sociological Association in New

York, NY. Hoffman, S. D. (1984). Black-white difference in returns to higher

education: Evidence from the 1970s. Economics of Education Review, 3, 13–21.

Horton, H. D. (1992). Race and wealth: A demographic analysis of black ownership. Sociological Inquiry, 62, 480–489.

Johnson, H. B. (2014). The American dream and the power of wealth: Choosing schools and inheriting inequality in the land of

opportunity. New York: Routledge. Keister, L. A. (2000a). Race and wealth inequality: The impact of

racial differences in asset ownership on the distribution of household wealth. Social Science Research, 29, 477–502.

Keister, L. A. (2000b). Wealth in America. New York: Cambridge University Press.

Keister, L. A. (2004). Race, family structure, and wealth: The effect of childhood family on adult asset ownership. Sociological Perspectives, 47(2), 161–187.

Keister, L. A. (2014). The one percent. Annual Review of Sociology, 40, 347–367.

Keister, L., & Moller, S. (2000). Wealth inequality in the United States. Annual Review of Sociology, 26, 63–81.

Kirp, D. L., Dwyer, J. P., & Rosenthal, L. A. (1995). Our town race, housing, and the soul of suburbia. New Brunswick, NJ: Rutgers University Press.

Koenker, R., & Gilbert, B. (1978). Regression quantiles. Economet- rica: Journal of the Econometric Society, 46(1), 33–50.

Lawrence, E. C. (1991). Poverty and the rate of time preference: Evidence from panel data. Journal of Political Economy, 99, 54–77.

Lewin-Epstein, N., Elmelech, Y., & Semyonov, M. (1997). Ethnic inequality in home ownership and value of housing: The case of immigrants in Israel. Social Forces, 75, 1439–1462.

Lewis, O. (1963). The children of Sanchez: Autobiography of a Mexican family. New York: Vintage Books.

Lipsitz, G. (2006). The possessive investment in whiteness: How white people profit from identity politics. Philadelphia: Temple University Press.

Loury, L. D., & Garman, D. (2001). College selectivity and earnings. Journal of Labor Economics, 13, 289–308.

Massey, D. S., & Denton, N. (1993). American apartheid: Segrega- tion and the making of the underclass. Cambridge, MA: Harvard University Press.

Neckerman, K., & Torche, F. M. (2007). Inequality: Causes and consequences. Annual Review of Sociology, 33, 335–357.

Oliver, M. L., & Shapiro, T. M. (1995). Black Wealth/White Wealth: A new perspective on racial inequality. New York: Routledge.

Oliver, M., & Shapiro, T. M. (2006). Black Wealth/White Wealth: A new perspective on racial inequality, tenth anniversary edition. New York and London: Routledge Publishers.

Parcel, T. L. (1982). Wealth accumulation of black and white men: The case of housing equity. Social Problems, 30, 199–211.

Ratcliff, R. E., & Maurer, S. (1995). Savings and investment among the wealthy: The uses of assets by high-income families in 1950 and 1983. In G. Moore, J. A. Whitt, R. E. Ratcliff, M. L. Oliver, & T. Shapiro (Eds.), Research in politics and society: The politics of wealth and inequality (5) (pp. 99–125). Greenwich, CT: JAI Press.

Rhee, N. (2013). Race and retirement insecurity in the United States. Washington, DC: National Institute on Retirement Security.

Rugh, J. S., & Massey, D. S. (2010). Racial segregation and the American foreclosure crisis. American Sociological Review, 75(5), 629–651.

Sakamoto, A., Takei, I., & Woo, H. (2006). Black-white wage differentials among college-educated workers: The effects of field of study and socioeconomic background. In Paper presented at the annual conference of the American sociological

association. Semyonov, M., & Lewin-Epstein, N. (2001). The impact of parental

transfers on living standards of married children. Social Indica- tors Research, 54, 115–137.

Semyonov, M., & Lewin-Epstein, N. (2011). Wealth inequality: Ethnic disparities in Israeli society. Social Forces, 89(3), 935–959.

Semyonov, M., & Lewin-Epstein, N. (2013). Ways to richness: Determination of household wealth in 16 countries. European Sociological Review, 29, 1134–1148.

Shapiro, T. (2004). The hidden cost of being African American: How wealth perpetuates inequality. New York: Oxford University Press.

Shapiro, T. M. (2006). Race, homeownership and wealth. Washington University Journal of Law & Policy, 20, 53–74.

Shapiro, T., Meschede, T., & Osoro, S. (2013). The roots of the widening racial wealth gap: Explaining the black-white eco-

nomic divide. Waltham: Institute on Assets on Social Policy, Brandeis University.

Smith, J. (1995). Racial and ethnic differences in wealth in the health and retirement study. The Journal of Human Resources, 30, S158–S183.

Squires, G. (1992). Community reinvestment: An emerging social movement. In G. D. Squires (Ed.), From redlining to re- investment: Community responses to disinvestment (pp. 1–37). Philadelphia: Temple University Press.

Sullivan, L., Meschede, T., Dietrich, L., Shapiro, T., Traub, A., & Ruetschlin, C. (2015). The racial wealth gap: Why policy matters. New York: Demos. http://www.demos.org/sites/default/ files/publications/-RacialWealthGap_1.pdf.

Szydlik, M. (2004). Inheritance and inequality: Theoretical reasoning and empirical evidence. European Sociological Review, 20(1), 31–45.

Taylor, P., Kochhar, R., Fry, R., Velasco, G., & Motel, S. (2011). Wealth gaps rise to record highs between whites, blacks and

hispanics. www.pewsocialtrends.org. Thomas, M., Herring, C., & Horton, H. D. (1994). Discrimination

over the life course: A synthetic cohort analysis of earnings differences between black and white males, 1940–1990. Social Problems, 41, 608–628.

Thomas, M., Herring, C., & Horton, H. D. (1996). Racial and gender differences in returns to education. In G. Thomas (Ed.), Race and ethnicity in America: Meeting the challenge in the 21st century

(pp. 239–252). New York: Taylor and Francis Publishers. U.S. Trust. (2013). Insights on wealth and worth. http://doing

morethatmatters.com/wp-content/uploads/2013/09/2013-UST- Insights-Wealth-and-Worth-Full-Report.pdf. Downloaded on January 12, 2015.

Wilson, W. J. (1987). The truly disadvantaged: The inner city, the underclass, and public policy. Chicago: University of Chicago Press.

Wolff, E. N. (1995). The rich get increasingly richer: Latest data on household wealth during the 1980s. In G. Moore, J. A. Whitt, R. E. Ratcliff, M. L. Oliver, & T. Shapiro (Eds.), Research in politics and society: The politics of wealth and inequality (5). Greenwich, CT: JAI Press.

Race Soc Probl (2016) 8:4–17 17

123

Author's personal copy