Association for Public Policy Analysis & Management

Panel: The Racial Wealth Gap: Measurement, Trends, and Policy Implications

(Social Equity)

As research has revealed the importance of asset holdings to overall economic security (Sherraden 1991, Caner and Wolff 2004) and the dramatic existing racial disparities in wealth (Oliver and Shapiro 2006, Kochhar, Fry et al. 2011), it is increasingly important for policymakers and researchers to better understand current racial wealth gaps and their sources in order to develop appropriate policy solutions; yet, several important areas of inquiry remain insufficiently explored. This panel will serve to bridge the gap in our knowledge regarding racial wealth disparities by helping to both improve our efforts to measure racial wealth gaps, thus, providing new insights into our understanding of present disparities, as well as uncover the material economic vulnerabilities experienced by diverse race/ethnicity subgroups in the U.S. due to differences in access to wealth holdings. The first paper brings an important contribution to the field by looking at wealth disparities by race, ethnicity and national origin more closely than has ever been possible before, using a new, innovative survey, the National Asset Scorecard for Communities of Color (NASCC). The analysis shifts us to a new level in understanding racial wealth disparities by moving beyond the aggregate data that has so often limited researchers. This innovative analysis now makes it possible to develop asset-building policies with mindful consideration to the diversity of experiences across households of color. The second paper continues the discussion by examining changes in racial wealth disparities since 2001 using the Survey of Consumer Finances (SCF) and highlighting how distinct measures of the wealth and assets as well as differing attention across the wealth distribution underscore diverse patterns of ongoing wealth disparities by race/ethnicity. Across the spectrum of wealth levels, the data reveal that the racial wealth gap remains sizeable across measures and that the Great Recession led to particular wealth losses among black and Latino households. By recognizing wealth trends among higher wealth, moderate wealth and low-wealth households by race, policymakers can better tailor policy solutions for asset-building to achieve greater impact. The third paper underscores that as we improve our knowledge of the racial wealth gap, we must also understand how wealth disparities lead to differences in material hardship. The authors explore how wealth does or does not help to mitigate financial shocks and find important differences by race, with black households experiencing less financial cushion from liquid assets than other groups in their low-to-moderate income sample. Their findings emphasize the importance of identifying potential differential impacts of proposed policy solutions. The moderator will provide perspective on current efforts and policy strategies to reduce wealth disparities by race. Our discussant will provide connections between the research papers and his team’s work to engage policymakers on reducing racial wealth inequality.