Racial Wealth Disparities: Is the Gap Closing? Working Paper No. 311.

Most studies of the economic progress of African Americans have focused on income or narrower measures, such as learning, to assess the extent to which any gains relative to other ethnic groups can be attributed to factors such as declining racial discrimination, affirmative action policies, changes in industrial composition, or a narrowing of the educational gap between African Americans and the rest of the population. This analysis explores how African Americans have fared in terms of wealth, a less well-known factor. The main source of data is the Panel Study of Income Dynamics (PSID) (1984, 1989, and 1994). During the study period, the ratio of average wealth between African Americans and Whites remained almost constant. The analysis suggests that it will be very difficult for African Americans to make up significant ground relative to Whites with respect to wealth. If the racial income gap were closed, it would take 72 years for the racial wealth gap to close. The implications of these findings for public policy are discussed. An appendix contains information about the PSID data. (Contains 9 tables and 36 references.) (SLD)