Racial differences in household wealth: Beyond Black and White

Over the past decade, micro-level studies of wealth have established extreme racial differences in wealth ownership [Keister, L. (2004). Race, family structure, and wealth: The effect of childhood family on adult asset ownership. Sociological Perspectives, 47, 161–187; Oliver, M., & T. Shapiro (1995). Black wealth/white wealth: A new perspective on racial inequality. New York: Routledge]. Non-White minority group status is hypothesized to negatively affect wealth accumulation, yet prior research has been limited almost exclusively to analyses of Blacks and Whites. But where do Asian and Hispanic households fall on the wealth continuum? Asian-Americans in particular represent a unique test of the race-wealth hypothesis. Do Asian-American households have a level of wealth commensurate with their overall high socio-economic status? We use 1992 Survey of Income and Program Participation data to analyze group differences in wealth across White, Black, Asian-American, Mexican-American, and Other Hispanic households. We first analyze the extent of wealth gaps among groups, controlling for geographic location, household structure, citizenship, life-cycle stage, and socio-economic status. Group-specific and decomposition analyses then probe the sources of these initial disparities. We find that Black, Mexican-American, and Other Hispanic households have significantly less wealth than White households, even in the presence of controls. We further establish that, despite their overall higher socio-economic status on other dimensions, Asian-American households have less wealth than White households once we control for group differences in the determinants of wealth. Our results also demonstrate that some wealth determinants (especially indicators of socio-economic status) have stronger effects for Whites than for racial-ethnic minorities, while other factors are more influential for minority groups. Decomposition analyses show that, even when groups are equivalently situated, the processes generating wealth still differs by race and ethnicity.