![]() ![]() The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation. ![]() A list of donors can be found in our annual reports published online here. The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. Overall, the message of the paper is that policymakers need to pay attention to the processes driving different wealth trajectories by race, as well as the end results. A white person who has median wealth in their early thirties is in fact expected to have more wealth in their late fifties than a Black person who has 90 th percentile wealth in their thirties.Īmong the options for tackling the racial wealth gap are progressive taxation of wealth bolstering the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) reparations targeted homeownership subsidies and lowering the costs associated with higher education. The racial wealth gap reflects different wealth dynamics as well as different starting positions. Recognize that comparisons are valid only when the two fractions refer to the same whole. Our paper shows how the patterns of wealth accumulation and wealth mobility during working life contribute to this inequality. Compare two fractions with different numerators and different denominators, e.g., by creating common denominators or numerators, or by comparing to a benchmark fraction such as 1/2. We are far from closing the racial wealth gap. For example, among those who start with wealth at the 90 th percentile, Black Americans have much lower wealth in their late fifties (51 st percentile) than white Americans (77 th percentile). ![]() Black Americans who have high wealth are much more likely to lose ground than white Americans with the same wealth. But this “ glass floor ” effect varies by race. For instance, Black Americans at the 10 th percentile in their early thirties are expected to reach the 24 th percentile in their late fifties - 13 percentiles lower than white Americans, who are expected to reach the 37 th percentile.Īs the chart shows, wealth status is even stickier at the top end of the distribution the wealthy are unlikely to fall too far. However, Black Americans’ wealth status rise s at a notably lower rate. Figure 1 shows the estimated wealth percentile attained by Black and white Americans by their late fifties, starting from the 10 th, 25 th, 50 th, 75 th, or 90 th wealth percentiles We compare people to others their age who were born around the same time.īoth Black and white Americans who have 10 th or 25 th percentile wealth in their early thirties are expected to improve their wealth position in their late fifties. On top of having less wealth than white Americans to begin with, Black Americans are both less likely to move up the economic ladder and more likely to slide down it. Upward mobility less likely for Black Americans ![]()
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