RT Journal Article
SR Electronic
T1 Racial Differences in Patterns of Wealth Accumulation
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 193
OP 227
DO 10.3368/jhr.XXXIX.1.193
VO XXXIX
IS 1
A1 Gittleman, Maury
A1 Wolff, Edward N.
YR 2004
UL http://jhr.uwpress.org/content/XXXIX/1/193.abstract
AB Making use of PSID data for 1984, 1989, and 1994, we examine race differences in patterns of asset accumulation. Our results indicate, as expected, that inheritances raise the rate of wealth accumulation of whites relative to that of African Americans. But, while whites devote a greater share of their income to saving, racial differences in saving rates are not significant, once we control for income. Though our results may be period-specific, we also do not find evidence that the rate of return to capital is greater for whites than for African Americans. Simulations suggest that African Americans would have gained significant ground relative to whites during the period if they had inherited similar amounts, saved at the same rate, had comparable income levels and, more speculatively, had portfolios closer in composition to those of whites.