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Family Connections and the Black-White Wealth Gap among Middle-Class Families

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Abstract

Recent scholarship has struggled to explain the large gaps that exist between the wealth that is amassed by white families compared to black families. These gaps exist in the population at large, even when one restricts one's analysis to middle-class families exclusively. This paper examines the connection between poverty among kin and wealth accumulation among middle-class families. Using data from the Panel Study of Income Dynamics, it finds evidence to support the hypothesis that part of the reason that black families have limited wealth is due to the fact that they are more likely to have poor relatives in their family tree.

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... As a result, Black individuals and families are more likely than their White counterparts to have network contacts that are in need of assistance. For example, middle-income Black families are much more likely than middle-income White families to have poor family members (Chiteji & Hamilton, 2002, 2005Heflin & Patillo, 2006) and less likely to have network contacts with college degrees (Tigges, Browne, & Green, 1998). Using data from the Panel Study of Income Dynamics, Chiteji and Hamilton (2002) estimate that more than one-third of middle income African Americans have poor parents, as compared to fewer than ten percent of middle income Whites. ...
... For example, middle-income Black families are much more likely than middle-income White families to have poor family members (Chiteji & Hamilton, 2002, 2005Heflin & Patillo, 2006) and less likely to have network contacts with college degrees (Tigges, Browne, & Green, 1998). Using data from the Panel Study of Income Dynamics, Chiteji and Hamilton (2002) estimate that more than one-third of middle income African Americans have poor parents, as compared to fewer than ten percent of middle income Whites. Importantly, White-Black differences in sibling and parent poverty contributes to racial inequality wealth and asset accumulation (Chiteji & Hamilton, 2002, 2005. ...
... Using data from the Panel Study of Income Dynamics, Chiteji and Hamilton (2002) estimate that more than one-third of middle income African Americans have poor parents, as compared to fewer than ten percent of middle income Whites. Importantly, White-Black differences in sibling and parent poverty contributes to racial inequality wealth and asset accumulation (Chiteji & Hamilton, 2002, 2005. Research has also found that Black mothers are more likely than White mothers to give financial assistance to network ties (Radey & Padilla, 2009;Raley, 1995), and that middle-class Black families feel an obligation to help the larger Black community and to help less fortunate relatives (McAdoo, 1978;Patillo, 2007;Shapiro, 2004). ...
Article
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Prior research shows that financial assistance from family and friends is an important source of support for families with children. Research on financial transfers has largely focused on the recipients of transfers, however. In this study, using longitudinal data from the Fragile Families and Child Wellbeing Study (n∼16,000 person-waves), the authors examine the association between the provision of financial assistance to family and friends and material hardship. The results from pooled regression and fixed effects models indicate that providing financial transfers is associated with an increased risk of hardship. The most economically disadvantaged groups, single mothers, those in the bottom income tertile, and Black mothers are the most likely to experience hardship after giving a transfer. These findings have important implications for understanding why families may have difficulty meeting basic and essential needs and how social networks may exacerbate the challenges of escaping poverty and establishing economic self-sufficiency
... The wealth gap between blacks and whites is well established in the literature both overall through studies of net worth 1 and within specific asset holdings (Blau and Graham, 1990;Chiteji and Hamilton, 2002;Gittleman and Wolff, 2004;Keister, 2000a;Oliver and Shapiro, 1997;Shapiro, 2004). Importantly, the gap has persisted over time for blacks and whites with similar income and education, despite substantial declines in racial income inequalities (Conley, 1999;Jackson et al, 2015;Keister, 2000a;Munoz et al, 2015). ...
... As the cultural economic sociology literature suggests, exposure to a distinct cultural institution will result in racial differences in the morals and meanings around finances that inform financial action and behavior itself (Alexander and Smith, 2001;Polletta and Tufail, 2014;Tach and Greene, 2014;Wherry, 2008Wherry, , 2016Zelizer, 1989Zelizer, , 2012. Given the relatively recent removal of legal barriers to asset accumulation, today's black middle-class is predominately first-generation investors making financial decisions without many social or familial ties with experience in economic activities (Chiteji and Hamilton, 2002). ...
... These studies show that individuals who grew up in a poor family were less likely to have a bank account or own a home as adults (Heflin and Pattillo, 2002), young families whose parents held stocks were more likely to own stocks and to have more money invested (Chiteji and Stafford, 1999), and low-income families were more likely to take on debt than seeking assistance from social ties (Tach and Greene, 2014). Additionally, a few studies explicitly consider black-white differences in financial behavior, identifying a number of ways in which cultural differences between blacks and whites result in differing wealth holdings (Chiteji and Hamilton, 2002;Choudhury, 2001;Gutter and Fontes, 2006;Hanna et al, 2010;Keister, 2000a;Nam et al, 2015;O'Brien, 2012;Yao et al, 2005). Most common among these studies are those on risk aversion by race, which find that blacks were less likely to take on high-risk, high-return investments than whites with similar incomes (Chiteji and Hamilton, 2002;Choudhury, 2001;Gutter and Fontes, 2006;Hanna et al, 2010;Keister, 2000a;Yao et al, 2005). ...
Article
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Studies of the racial wealth gap have primarily focused on structural barriers and institutional racism that excluded racial minorities from financial investments. Yet, little research has explored the implications of cultural differences produced by this historical exclusion. Informed by the cultural economic sociology literature, this paper investigates how racial differences in ideal financial behavior contribute to differences in wealth holdings between blacks and whites. Based on data from the Survey of Consumer Finances for 2001, 2004, and 2007, I find that ideal financial behavior around borrowing, saving, and investing contributed to differences in financial holdings between blacks and whites in two ways, which both resulted in more financial investments among white respondents, even when controlling for other characteristics. The same ideal led to either whites holding significantly larger investments than blacks or had a positive effect on whites? financial holdings and a negative effect on blacks?. These findings suggest that blacks and whites may interpret ideal financial behaviors differently by assigning distinct meaning to those behaviors or defining the relationship between the financial activities of borrowing, saving, and investing differently. Ultimately, I show that culturally distinct ideals between blacks and whites contribute to the perpetuation of the racial wealth gap.
... Households with higher education levels and greater income enjoy better access to credit markets and increased asset accumulation, which disadvantages racial minorities with less education and income (Bricker et al. 2014;Scholz and Sheshardi 2009). Family poverty, a consequence of labor market inequality, also impedes minorities' transitions into homeownership and overall wealth levels (Chiteji and Hamilton 2002;Heflin and Pattillo 2006). Thus, racial disparities in education, employment, and income are likely connected to disparities in credit markets and wealth. ...
... These disparities also extend to home equity, interest rates, and fees (Flippen 2004;Krivo and Kauffman 2004). Beyond homeownership, households headed by racial minorities accumulate less financial wealth and own fewer assets (Chiteji and Hamilton 2002;Scholz and Shesardi 2009), and these disparities increase with the degree of risk (and reward) associated with owning each asset (Keister 2000b). Racial minorities also have less attachment to traditional or mainstream financial institutions, which often results in an overreliance on costly subprime lenders (Caskey 1996). ...
Article
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This article investigates net worth disparities by race and ethnicity using pooled data from the 1998–2013 waves of the U.S. Survey of Consumer Finances. I apply unconditional quantile regression models to examine net worth throughout the wealth distribution and decomposition procedures to demonstrate how different factors related to demographics, human capital, financial attitudes, and credit market access contribute to racial wealth disparities. In the aggregate, non- Hispanic black households held $8,000 less in net worth than non-Hispanic white households at the 10th percentile, $204,000 less at the median, and $1,055,000 at the 90th percentile. Hispanic households faced similar disadvantages, holding $4,000 less in net worth at the 10th percentile, $208,000 less at the median, and $1,023,000 less at the 90th percentile. Disparities continued, but declined, after accounting for labor market disadvantages and credit market access, which again varied across the distribution. Decomposition models show that demographic and income differences mattered more for high-wealth households. These variables accounted for 43–55 percent of the gap for high-wealth households at the 90th percentile but only 10–28 percent at the 10th percentile. Among low-wealth households, differential access to credit markets and homeownership was associated with a larger proportion of the gap in net worth.
... Various behavioral explanations for the racial wealth gap have been examined, including differences in the receipt of inheritances (Blau and Graham, 1990;Menchick and Jianakoplos, 1997;Gittleman and Wolff, 2004), permanent income (Altonji and Doraszelski, 2005), saving behavior (Altonji and Doraszelski, 2005;Gittleman and Wolff, 2004), and cultural differences in attitudes toward risk, financial decision making, time preference, or expectations of family support (Chiteji and Hamilton, 2002;Scholz and Levine, 2004;Boshara, Emmons, and Noeth, 2015). With the exception of inheritances-which Menchick and Jianakoplos (1997) estimate explain 10%-20% of the racial wealth gap-and differences in parental and sibling needwhich Chiteji and Hamilton (2002) find explains up to 27% of the racial wealth gap-the aforementioned behavioral explanations are only weakly supported by the data. ...
... Various behavioral explanations for the racial wealth gap have been examined, including differences in the receipt of inheritances (Blau and Graham, 1990;Menchick and Jianakoplos, 1997;Gittleman and Wolff, 2004), permanent income (Altonji and Doraszelski, 2005), saving behavior (Altonji and Doraszelski, 2005;Gittleman and Wolff, 2004), and cultural differences in attitudes toward risk, financial decision making, time preference, or expectations of family support (Chiteji and Hamilton, 2002;Scholz and Levine, 2004;Boshara, Emmons, and Noeth, 2015). With the exception of inheritances-which Menchick and Jianakoplos (1997) estimate explain 10%-20% of the racial wealth gap-and differences in parental and sibling needwhich Chiteji and Hamilton (2002) find explains up to 27% of the racial wealth gap-the aforementioned behavioral explanations are only weakly supported by the data. Differences in savings behavior cannot explain the racial wealth gap: conditional on income, Blacks save slightly more than Whites Dal Borgo, 2019;Darity and Mullen, 2020). ...
... Impoverished networks have been suggested as an explanation for racial and ethnic wealth gaps also; instead of saving and investing, it has been found that these minority groups are supporting their kin (O'Brien 2012). In the minority "culture of mobility" paradigm, it is suggested that those minority-group individuals who become middle-class must negotiate relations with poorer kin, limiting their further upward mobility (Chiteji and Hamilton 2002;Neckerman, Carter, and Lee 1999). Indeed, blacks and Hispanics have been found to take more responsibility for the welfare of their kin, expressed in the idea of "linked fate" (Dawson 1994). ...
... Drawing on theory and previous literature, I formulate competing hypotheses about the role of racial and ethnic differences in predicting the outcomes for those who move into an extendedfamily household as guests (H3) and as hosts (H4). Drawing on the minority culture of mobility paradigm (Chiteji and Hamilton 2002;Neckerman et al. 1999): ...
Article
In times of hardship, moving in with family is one strategy for alleviating economic deprivation and uncertainty. The ability of the family to buffer against poverty may vary by the resources available to and the economic needs of individuals. I assess how the formation of extended-family households is associated with a move into or out of poverty and how this association varies by race and ethnicity, since economic resources and norms around extended-family households differ. Using longitudinal data that span four years, I estimate linear fixed effects regression models to assess how changes in living arrangements are related to changes in poverty. I find that moving into an extended-family household reduces poverty, especially for the joining family unit. Most of this poverty reduction occurs through a family safety net, with a non-poor family taking in poor family units.
... Various behavioral explanations for the racial wealth gap have been examined, including differences in the receipt of inheritances (Blau and Graham, 1990;Menchick and Jianakoplos, 1997;Gittleman and Wolff, 2004), permanent income (Altonji and Doraszelski, 2005), saving behavior (Altonji and Doraszelski, 2005;Gittleman and Wolff, 2004), and cultural differences in attitudes toward risk, financial decision making, time preference, or expectations of family support (Chiteji and Hamilton, 2002;Scholz and Levine, 2004;Boshara, Emmons, and Noeth, 2015). With the exception of inheritances-which Menchick and Jianakoplos (1997) estimate 1 explain 10%-20% of the racial wealth gap-and differences in parental and sibling needwhich Chiteji and Hamilton (2002) find explains up to 27% of the racial wealth gap-the aforementioned behavioral explanations are only weakly supported by the data. ...
... Various behavioral explanations for the racial wealth gap have been examined, including differences in the receipt of inheritances (Blau and Graham, 1990;Menchick and Jianakoplos, 1997;Gittleman and Wolff, 2004), permanent income (Altonji and Doraszelski, 2005), saving behavior (Altonji and Doraszelski, 2005;Gittleman and Wolff, 2004), and cultural differences in attitudes toward risk, financial decision making, time preference, or expectations of family support (Chiteji and Hamilton, 2002;Scholz and Levine, 2004;Boshara, Emmons, and Noeth, 2015). With the exception of inheritances-which Menchick and Jianakoplos (1997) estimate 1 explain 10%-20% of the racial wealth gap-and differences in parental and sibling needwhich Chiteji and Hamilton (2002) find explains up to 27% of the racial wealth gap-the aforementioned behavioral explanations are only weakly supported by the data. Differences in savings behavior cannot explain the racial wealth gap: conditional on income, Blacks save slightly more than Whites Dal Borgo, 2019;Darity and Mullen, 2020). ...
Preprint
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Using data on household balance sheets from the Survey of Consumer Finances and data on macroeconomic rates of return from Jorda et al. we construct two alternative series for household rates of return by race from 1989 to 2016. Our estimates suggest a persistent racial gap in the rate of return on assets between 1 and 4 percentage points. The gap in returns remains even after conditioning on demographic factors, labor market factors, credit history, portfolio composition, household attitudes toward savings, financial literacy, and inheritance---suggestive of a role for discrimination. Recentered influence function (RIF) decompositions indicate between 40% and 53%---1.2 to 1.6 percentage points---of the difference in median returns between Black and White households is unexplained by observable characteristics. A standard Oaxaca-Blinder decomposition suggests that differential rates of return can explain up to 14% of the racial wealth gap at the mean. Finally, our data on differential rates of return allow us to effectively rule out explanations for the racial wealth gap based on myopia or excessive time preference. Given observed series for consumption and rates of return, a standard lifecycle model requires Black households to discount the future less than White households in order to match the data.
... Various behavioral explanations for the racial wealth gap have been examined, including differences in the receipt of inheritances (Blau and Graham 1990;Menchik and Jianakoplos 1997;Gittleman and Wolff 2004), permanent income (Altonji and Doraszelski 2005), saving behavior (Altonji and Doraszelski 2005;Gittleman and Wolff 2004), and cultural differences in attitudes toward risk, financial decision making, time preference, or expectations of family support (Chiteji and Hamilton 2002;Scholz and Levine 2004;Boshara et al. 2015). With the exception of inheritances-which Menchik and Jianakoplos (1997) estimate explain 10-20% of the racial wealth gap-and differences in parental and sibling need-which Chiteji and Hamilton (2002) find explains up to 27% of the racial wealth gap-the aforementioned behavioral explanations are only weakly supported by the data. ...
... Various behavioral explanations for the racial wealth gap have been examined, including differences in the receipt of inheritances (Blau and Graham 1990;Menchik and Jianakoplos 1997;Gittleman and Wolff 2004), permanent income (Altonji and Doraszelski 2005), saving behavior (Altonji and Doraszelski 2005;Gittleman and Wolff 2004), and cultural differences in attitudes toward risk, financial decision making, time preference, or expectations of family support (Chiteji and Hamilton 2002;Scholz and Levine 2004;Boshara et al. 2015). With the exception of inheritances-which Menchik and Jianakoplos (1997) estimate explain 10-20% of the racial wealth gap-and differences in parental and sibling need-which Chiteji and Hamilton (2002) find explains up to 27% of the racial wealth gap-the aforementioned behavioral explanations are only weakly supported by the data. Differences in savings behavior cannot explain the racial wealth gap: conditional on income, evidence suggests Blacks save slightly more than Whites Darity and Mullen 2020). ...
Article
Full-text available
Using data on household balance sheets from the Survey of Consumer Finances and data on macroeconomic rates of return from Jordà et al. (Q J Econ. 134(3):1225–1298, 2019) we construct two alternative series for household rates of return by race from 1989 to 2016. Our estimates suggest a persistent racial gap in the rate of return on assets between 1 and 4 percentage points. The gap in returns remains even after conditioning on demographic factors, labor market factors, credit history, portfolio composition, household attitudes toward savings, financial literacy, and inheritance—suggestive of a role for discrimination. Recentered influence function (RIF) decompositions indicate between 40 and 53%—1.2 to 1.6 percentage points—of the difference in median returns between Black and White households is unexplained by observable characteristics. A standard Oaxaca-Blinder decomposition suggests that differential rates of return can explain up to 14% of the racial wealth gap at the mean. Finally, our data on differential rates of return allow us to effectively rule out explanations for the racial wealth gap based on myopia or excessive time preference. Given observed series for consumption and rates of return, a standard lifecycle model requires Black households to discount the future less than White households in order to match the data.
... For example, after controlling for income and demographic factors, Blau and Graham (1990) found that almost three-quarters of the black-white wealth gap could not be explained. Further review of the economic literature by Hamilton and Chiteji (2013) revealed that inheritances, bequests, and intrafamily transfers account for substantially more of the racial wealth gap than any other demographic or socioeconomic indicators, including education, income, and household structure (see, for example, Blau and Graham 1990;Menchik and Jianakoplos 1997;Conley 2009;Chiteji and Hamilton 2002;Charles and Hurst 2003;Gittleman and Wolff 2007). Shapiro et al. (2013) estimate that among the families their study followed for 25 years, whites were five times more likely to inherit than African Americans (36 percent to 7 percent, respectively). ...
Technical Report
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New data collected for the Boston metropolitan statistical area (MSA) as part of the National Asset Scorecard for Communities of Color (NASCC) survey provide detailed information on financial assets that allow analysis to extend beyond the traditional black-white divide. Targeting US - born blacks, Caribbean blacks, Puerto Ricans, Dominicans, and other Hispanics, findings underscore the large racial and ethnic disparities in financial wealth, even after controlling for demographic and socioeconomic status. Further, some notable differences between Boston’s communities of color highlight the importance of detailed analyses for research on the racial wealth gap. In particular, among nonwhite communities, Dominicans report comparatively low asset levels and high debt, while Caribbean blacks report relatively higher levels of wealth. Altogether, these findings point to the need for wealth building opportunities in communities of color and further investigation of the causes and consequences of financial disparities between groups of color disaggregated by ancestral origin.
... The authors found that more members per African American family contribute to household income totals than white family members; African Americans work on average an additional 12 weeks to gain the equivalent income of a white family. Further, as a result of the disproportionate number of African Americans growing up poor, even when they reach the middle class, they are more likely than Whites to have siblings still living in poverty with whom they share their income (Chiteji & Hamilton, 2002;Heflin & Pattillo, 2006). This reality limits financial accumulation for African Americans and may inhibit the ability to transition to or maintain middle class income levels (Avery & Rendall, 2002). ...
... Baby Bonds could stymie economic pulls of low-wealth family members. Research shows that poverty in the family is a drain on the ability of middle-class Black families to build and keep wealth (Chiteji and Hamilton, 2002). Finally, a Baby Bonds program could mitigate some of the impact of mass incarceration that disproportionately affects Black families. ...
... Due to this history of unequal treatment in the economic, political, and social spheres, today's Black families confront greater proximity to intergenerational, spatial, and relational disadvantage than their White counterparts. That is, irrespective of economic status, Black Americans are more likely to have grown up in impoverished households and communities (Sharkey, 2013), to live in distressed neighborhoods (Massey & Denton, 1993;Sharkey, 2014), and to be embedded in disadvantaged kin and peer networks (Chiteji & Hamilton, 2002;Tigges, Browne, & Green, 1998). In turn, family income may operate differently for Black and White children due to the ways proximity to (dis)advantage impacts families' (1) access to resources, (2) exposure to stressors, and (3) patterns of parental care and investment. ...
Chapter
Racial and socioeconomic achievement gaps appear in early childhood, persist into adolescence, and undermine long-term well-being. Scholarship typically examines whether family socioeconomic inequality explains racial skills gaps; however, increasing research indicates that the academic returns to socioeconomic status (SES) differ for Black and White children and that the size of Black-White achievement gaps vary by SES, with the largest disparities evident among the highest-SES students. The processes underlying the development of within-SES racial gaps remain unclear, though growing evidence suggests that racial disparities in proximity to (dis)advantage shape family life in critical ways. In particular, Black-White differences in proximity to spatial (dis)advantage may have serious implications for young children's health and well-being. Yet, little research has directly explored how race and family economic status shape children's family and neighborhood contexts. This chapter presents a mixed-methods study that integrated semi-structured interview, neighborhood observation, and neighborhood crime data from a socioeconomically-diverse sample of Black and White families to explore how the interplay between race and family economic status shapes parents' perceptions of neighborhood safety. Findings revealed that race intersects with SES to produce complex patterns of inequality in community life and neighborhood conditions. Although economic disadvantage places limits on all parents, irrespective of race, dangerous conditions and stressors at the neighborhood level tended to be more pronounced and take a more pernicious form among low-income Black parents. Higher income granted parents escape from the most serious threats to their children's well-being, but the returns to increases in SES were not equivalent for middle-income Black and White families, and only among the most affluent families did race differences diminish considerably or disappear altogether.
... nber.org/cycles.html have higher financial literacy (Lusardi 2008) and trust in the financial sector (Choudhury 2002), and are less likely to be single parent households or provide financial assistance to extended family and friends (Chiteji and Hamilton 2002;O'Brien 2012). 3 We consider our work on the financial crisis as contributing to this larger discussion on racial differences. ...
Article
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The financial crisis of 2007–2009 was arguably the most severe financial crisis in American history and the subsequent Great Recession was the worst economic downturn in the USA since the Great Depression. In this paper, we analyze data from the Panel Survey of Income Dynamics (PSID) to examine the effects of the crisis and recession on the wealth of White and Black families using graphical, cross section, and panel empirical models. While other studies have measured the short-term effects of the crisis and recession on American household wealth, we are able to look at longer-term wealth effects by incorporating data from the recently released 2015 wave of the PSID. Our results indicate that the negative consequences of the economic downturn on Black families’ wealth were severe and longer-lasting than for White families.
... Even in times of economic prosperity, blacks in the USA face an array of financial constraints, relative to whites, that limit their capacity to build a financial buffer to insulate themselves from the economic insecurities posed by joblessness. For instance, blacks earn lower wages for comparable skills (Goldsmith et al. 2007), and take on exceptional kin obligations in part due to a greater likelihood of having family members facing financial stress (Chiteji and Hamilton 2002). These factors help to explain why blacks have accumulated less wealth than whites (De La Cruz-Viesca et al. 2015). ...
Article
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Social scientists from a range of disciplines have provided evidence of a connection between unemployment and mental health. However, researchers recognize that poor mental health can lead to joblessness, highlighting the challenge of generating an accurate estimate of the impact of unemployment on mental health. In addition, virtually all of these studies use either self-reported measures of mental health or broad measures of emotional well-being such as self-esteem or constructs of general emotional health which are less than ideal. A shortcoming in the literature is that scholars have yet to examine whether race effects the extent of the effect of unemployment on psychological distress. Unemployment might have a smaller impact on blacks, because they have a higher degree of resilience due to encountering a greater and more intense array of life challenges, or a larger impact because of the fear of the consequences of unemployment due to structural discrimination and fewer buffers such as wealth. This paper uses measures of mental health based on the DSM-IV and ICD-10 diagnostic manuals to offer estimates of the link between unemployment and psychological distress for whites and blacks. We directly consider the prior mental health background of individuals to address the problem of reverse causality bias that mars virtually all existing estimates of the link between mental health and unemployment. This also allows us to offer convincing evidence on the relative effect of unemployment on mental health across racial groups. The analysis uses data from the National Comorbidity Survey-Replication. We construct two subsamples, one composed of those with no previous identified bouts of poor mental health (resilient) and a second group containing individuals with a history of psychological distress (vulnerable). Resilient persons, relative to those with a history of suffering from psychological distress, should be less likely to suffer a bout of poor mental health leading to unemployment. In addition, the influence of other covariates is likely different for resilient versus vulnerable individuals. Thus, our contention is that estimates generated using the resilient subsample will be less prone to suffer from reverse causality bias, measurement error, and specification bias. Hence, these estimates will provide the most accurate gauge of the mental costs of unemployment across racial groups. Our findings reveal that among resilient persons the pernicious effect of short-term unemployment on psychological distress is significantly greater for blacks. Our findings, based on data from the recession that began in 2001, allow us to infer that the Great Recession had a more intense adverse mental health effect on members of the black community. Our results imply that policymakers should consider both the monetary and psychological costs of unemployment, as well as their racial implications, when formulating policy to address the effects of economic downturns.
... Comparing inheritance patterns among black and white households over a ten-year period, Gittleman and Wolff (2000) come to similar conclusions. Chiteji and Hamilton (2002) find that 27 percent of the racial wealth gap among middle-income households is explained by family background, particularly as one considers both parental and sibling need. Narrowing the lens, another study (Charles & Hurst, 2002) discover that 42 percent of white homebuyers received help from their families in collecting a down payment as compared to 10 percent of black homebuyers. ...
Article
The emerging subfield of stratification economics is a response to the orthodoxy’s resistance to recognizing the role of racial and ethnic disparities and its penchant for adopting cultural explanations for intergroup differences. With this view, the literature on the racial wealth gap and its particular embrace of the Life Cycle Hypothesis (LCH) offers a clear example of this critique at work. Not only is the LCH incapable of explaining why the racial wealth gap is so much larger than the income gap, but its limitations restrict the range of explanations explored. As an alternative, this paper introduces the Wealth Privilege (WP) model. Unlike the LCH, the WP model can incorporate the effects of contemporary racism as well as the systemic sources that are a legacy of several centuries of racialized policies. Using evidence from the 2013 Survey of Consumer Finances (SCF), this article offers empirical corroboration as well. Since the SCF queries households on their attitudes toward saving and investment, this article investigates the extent that cultural differences explain the wealth gap. To limit the problem of skewness, which is inherent in wealth studies, the analysis uses an inverse hyperbolic-sine transformation of household net worth. The OLS regression results show scant support for key features of the LCH while demonstrating the importance of asset ownership and family support, both crucial facets of the WP model. Two different decomposition methods, Blinder - Oaxaca and DiNardo - Fortin - Lemieux, corroborate these conclusions. As wealth is easily transferable across generations, the evidence supports the contention that household wealth serves as a source of economic stratification as it functions to preserve and even widen the racial wealth gap.
... This mild savings rate advantage is indicative of even greater thriftiness among blacks, since they typically have more kin obligations to assist low-income relatives which, further reduces the ability to save (Chiteji and Hamilton 2002;and Heflin and Patillo 2006). If anything, it appears that blacks generally live more frugal lives than whites; a study conducted by the Institute on Assets and Social Policy using the 2013 Survey of Consumer Finances found that, at comparable levels of income, whites spend 1.3 times more than blacks (Traub et al.). ...
... inter vivos and bequests) is positively associated with children's wealth (Schoeni 1997). At the same time, blacks have more familial pressure to transfer economic resources to parents or other relatives, which results in lower wealth accumulation (Heflin and Patillo-McCoy, 2000;Chiteji and Hamilton, 2002). However, we do not know whether parental financial support produces different effects on a child's subsequent economic achievements depending on the type and purpose of the support. ...
... In addition, intergenerational transmission of wealth and the opportunities this provides are unequal when race is taken into account. Black families who attain higher levels of income typically have greater transfer demands from their less well-off kin networks in comparison to their white peers, further reducing the resources earmarked for savings (Chiteji and Hamilton 2002;Heflin and Pattillo 2000). Furthermore, intergenerational transmissions of wealth and the opportunities these provide are also unequal by race (Blau and Graham 1990;Menchik and Jianakoplos 1997;Gittleman and Wolff 2007). ...
Article
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The widening wealth gap in the United States is a worrisome sign that millions of families nationwide do not have enough in assets to offer better opportunities for future generations. Wealth allows families to make investments in homes, in education, and in business creation. On the basis of data collected using the National Asset Scorecard for Communities of Color (NASCC) survey, we report that, when analyzed by race, wealth accumulation is vastly unequal. By means of the NASCC survey, researchers have collected, for the first time, detailed data on assets and debts among subpopulations, according to race, ethnicity, and country of origin — granular detail ordinarily unavailable in public datasets. In this analysis we focus on estimates for U.S. born blacks, Caribbean blacks, Cape Verdeans, Puerto Ricans, and Dominicans in the Boston Metropolitan Statistical Area (MSA). Our analysis shows that with respect to types and size of assets and debt held, the data collected on white households and nonwhite households exhibit large differences. The result is that the net worth of whites as compared with nonwhites is staggeringly divergent.
... Although social capital is most often thought of in its positive form, as "the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance or recognition" (Bourdieu 1986, p. 248), social capital can also present certain negative consequences dependent upon 1 3 the content and needs of a person's social networks (Portes 1998;Furstenberg 2005). For instance, studies of racial wealth disparities and informal financial assistance have shown that race differences in network poverty contributed to the overall racial wealth gap, even though some network members benefited at the expense of others (Chiteji and Hamilton 2002;Heflin and Pattillo 2002;O'Brien 2012). This is also likely the case among extended households where coresidence improves the situations of the "guest" household members but negatively affects the resources of "hosts," resulting in an overall negative association with wealth when compared to other households. ...
Article
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This paper examines wealth disparities by gender and household structure in the United States using data from the 1998–2013 Survey of Consumer Finances. Following studies of economic insecurity, we placed households at the center of our analysis to highlight the interconnected nature of wealth with multiple aspects of family structure. We investigated net worth by both gender and household structure, which includes variation by partnership status and the presence of other adult relatives and their roles within the household. We found that wealth disparities were largest among single adult households, but these varied by gender. Female single adult households held some of the lowest levels of net worth, but after accounting for key explanations of wealth inequality, single male households actually held greater wealth than two-adult partnered households. This relationship further depended on the presence of extended family members, where gender disparities were smaller among households with other relatives present.
... Moreover, research by Steinberg and Wilhelm (2005) finds that "If anything, Black families are slightly more generous [than white families] ($1,363 per family versus $1,325)." Also, the work by Ngina Chiteji and Darrick Hamilton (2002) demonstrates that if we expand our notion of charitable giving to include relatives and friends in need, Black families have even fewer resources to give as a result of having substantially more kin in need than their White middle-income counterparts. Basically, Black alumni are not failing Black colleges; rather, the legacy of the racial wealth gap has left the Black community with markedly lower financial resources and higher financial need. ...
Article
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This article examines the mismatch between the political discourse around individual agency, education, and financial literacy, and the actual racial wealth gap. The authors argue that the racial wealth gap is rooted in socioeconomic and political structure barriers rather than a disdain for or underachievement in education or financial literacy on the part of Black Americans, as might be suggested by the conventional wisdom. Also, the article presents a stratification economic lens as an alternative to the conventional wisdom to better understand why the racial wealth gap persists
... Compared to white workers, Black and Latino workers in the United States experience significant labour-market disadvantages. These include higher unemployment rates, lower wages, overrepresentation in low-wage jobs and occupations, overrepresentation in informal employment, and reduced economic mobility (Catanzarite and Trimble 2007;Chiteji and Hamilton 2002;Dariety, Dietrich, and Hamilton 2002;Melendez 2011, 2015). ...
Article
A significant body of literature suggests that skin tone segmentation is a salient characteristic of intergroup economic inequality in the United States. Yet, empirical investigations of this social phenomenon and its impact on labour market outcomes for worker’s in the United States remains limited or focused on the impact of skin tone on wages. This article examines whether or not phenotypic variability in skin tone among workers influenced levels of job quality experienced during the recessionary era (2007-2012). Data from the Puerto Ricans and the Impact of the Great Recession Survey were used to estimate a Poisson Regression with Endogenous Treatment Effects to consider the impact that variations in skin tone have on levels of job quality experienced by workers. Findings suggest evidence of skin tone labour market segmentation, as workers with darker skin shades experienced lower levels of job quality than those workers with lighter skin tones within and across larger racial and ethnic groups. The results also suggest important regional variations in the experience of skin tone labour market segmentation in the United States. The article concludes by reflecting on the implications of the findings for racial economic inequalities and patterns of social stratification in the contemporary United States.
... Although an extensive body of research indicates substantial inequality in the distribution of wealth by racial and ethnic groups, few studies include measures related to American Indian/Alaska Native populations (hereafter natives) in the U.S.A. (see, e.g. Blau and Graham 1990; Oliver and Shapiro 1995; Conley 1999; Chiteji and Hamilton 2002; Gittleman and Wolff 2004; Lui et al. 2005; Ong 2006; Chiteji 2010; Loving, Finke, and Salter 2012; Fontes and Kelly 2013; Kochhar and Fry 2014; Marre 2014; McKernan et al. 2014; Tippett et al. 2014; Hamilton et al. 2015; Muñoz et al. 2015). 1 Data and the limited number of observations in our sample, the median results may be more indicative of the " typical " asset holdings for members of a particular ethnic/tribal group. 4 In the next section, we discuss the related literature on asset building for natives. ...
Article
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We analyse survey data from the National Asset Scorecard for Communities of Color Project for asset accumulation in Tulsa, Oklahoma. The survey oversampled the American Indian/Alaska Native population in order to examine asset accumulation among a variety of racial, ethnic and legal status groups. We examine differences in asset accumulation across tribal members from a variety of American Indian tribes. Additionally, we make comparisons across those that are tribally enrolled to those that are not tribally enrolled. We find substantial difference across tribal affiliation in our data once we disaggregate the category of American Indian. Our research adds a new dimension to the literature examining differences in wealth accumulation by race and political status for a little-studied group. Specifically, we examine the intersection of race and legal status in wealth and asset accumulation.
... In the United States, because systems of racial and social stratification were historically interconnected (Garcia Coll et al., 1996;Ladson-Billings, 2006), contemporary Black families confront greater proximity to intergenerational, spatial, and relational disadvantage than White families, who conversely tend to benefit from greater proximity to advantage (Gosa & Alexander, 2007). Regardless of SES, Black Americans are more likely to have grown up in poor households and communities (Sharkey, 2013), to live in or near distressed neighborhoods (Logan, 2011;Pattillo-McCoy, 1999), and to be embedded in disadvantaged kin and peer networks (Chiteji & Hamilton, 2002;Tigges, Browne, & Green, 1998). As a result, dimensions of SES, such as household income and parental education, may not hold the same meaning and afford the same experiences (or conditions of advantage and disadvantage) to Blacks and Whites. ...
Article
Theory and limited research indicate that race and socioeconomic status (SES) interact dynamically to shape children’s developmental contexts and academic achievement, but little scholarship examines how race and SES intersect to shape Black–White achievement gaps across development. We used data from the Early Childhood Longitudinal Study, Kindergarten Class of 1998–99 (N ≈ 9,100)—which tracks a nationally representative cohort of children in the United States—to investigate how race and family SES (i.e., parental education and household income) intersect to shape trajectories of academic skills development from kindergarten entry through the spring of eighth grade. Results reveal that household income and parental education were differentially related to academic development, with Black–White gaps narrowing (and Black children’s skills growing slightly faster) at higher income gradients but widening (and Black children’s skills developing more slowly) at higher levels of educational attainment. Despite performance advantages at kindergarten entry, large baseline disparities meant that higher-income Black students underperformed their White peers by middle school, whereas Black students with better-educated parents consistently trailed their White counterparts. Taken together, these findings suggest that failure to examine how race and SES intersect to shape achievement gaps may obscure complex patterns of educational inequality.
... As obtaining information is costly and even costlier and takes more effort for poor people than for those with ample money, the poor have much more difficulty acquiring credible information. The reason is that they lack not only money but also the social networks that could often facilitate the smooth access to information (Chiteji & Hamilton, 2002). That means that they have a formidable task of assessing uncertainty, an important element in successfully mastering the art of living in a path-dependent world. ...
Article
Markets have 14 Achilles heels that reduce the chances of those born into poverty to succeed in today’s complex economy. These intrinsic imperfections, generally overlooked in mainstream Econ 101, include costly information that implies that its acquisition by poor people requires a greater share of their income. Because of inferior schooling opportunities, the poor are more exposed to the myriad of problems associated with bounded rationality. That tastes are assumed to be exogenous is hardly a benign oversight, because people enter the market as children; so the market has a long time to affect their character. This has a harsh effect especially on poor children because they are particularly vulnerable to advertisements and Pavlovian conditioning. Opportunistic behavior means that people with better information can take advantage of others in an immoral, unprincipled, cunning, crafty or deceptive manner. Because of less information at their disposal and because of inferior schooling, minorities are more exposed to the vagaries of predatory advertisements. This often leads to exploitation by people with more power. Mainstream Econ 101 overlooks these Achilles heels. Hence, economists who teach conventional economics provide succor for the maintenance of the status quo which finds minorities in a disadvantageous position in U.S. society.
... They do mention the myriad of problems associated with imperfect information but not that information is costly to acquire, and this poses a huge obstacle to efficient outcomes and to human flourishing, particularly for those with low-income, inasmuch as they cannot afford to obtain sufficient information to make solid decisions. This is especially true in the presence of uncertainty and when sequential complex decisions are involved (points 31, 33) (Akerlof, 2002;Stiglitz 2009;Chiteji and Hamilton 2002;Greenwald and Stiglitz,1986). In turn, this Achilles heel of laissez faire, places poor people at a distinct disadvantage especially in the Information Age and implies that the poor are unable to make good decisions that would enable them to escape poverty and flourish (points 7, 8). ...
... Importantly, financial ties to extended family members represent not only potential sources of support but also a drain on resources (Chiteji and Hamilton 2002). Theoretical work conceptualizes this potentially detrimental impact of familial ties as negative social capital, or "the pressure on an individual actor to incur costs by virtue of membership in social networks or other social structures" (O'Brien 2012:378). ...
Article
Research shows that extrahousehold kin economic resources contribute to the racial gap in transitions into homeownership, but the extent to which these resources matter for racial disparities in exits from homeownership is less understood. Using longitudinal data from the Panel Study of Income Dynamics, 1984-2017, we examine the role of extrahousehold kin wealth and poverty in shaping racial inequalities in the risk of exiting homeownership. Our nonlinear decomposition results indicate that racial differences in family network resources explain a nontrivial portion of the racial gap in homeownership exit, but there is little evidence that the effects of kin resources on exit are moderated by race. Among both Black and White owners, having wealthier noncoresident kin does not lessen the negative impacts of adverse economic or health shocks on the probability of losing homeownership. Our findings have implications for policies and programs designed to buttress the ability of minority households, especially those in financial distress, to sustain the wealth-building state of homeownership.
... The findings from the study presents several potential implications for the economic well-being of racial minorities and immigrant groups. For racial groups that lack socioeconomic heterogeneity (Chiteji & Hamilton, 2002;Heflin & Pattillo, 2006), providing financial support to family members and friends in need may be a main contributor of economic instability for members of the Black and Native American middle class. Compared to native-born Whites ($124,828) and native-born Latinos ($44,390) Mexican immigrants who have lived in the U.S. for 10 years or less have a net worth of $2,526 (Keister et al., 2016). ...
Article
Interpersonal relationships within social networks provide resources for individuals to overcome financial hardships and emotional uncertainty. One form of support, giving money to family members and friends (i.e., informal financial assistance), has received little empirical attention, even when it comes at an economic and social cost to the person providing support. Drawing on negative social capital theory, it is hypothesized that racial minorities and immigrants may be more likely to provide monetary support to members of core discussion networks, given the persistent economic embedded in their social networks. The objective of this study is to examine i) racial differences in providing financial assistance ii) how race moderates the relationship between socioeconomic status (SES) and providing financial assistance iii) how race moderates the relationship between nativity status and providing financial assistance. The results of this project, using logistic regression analyses of the 2017 Panel Study of Income Dynamics (PSID), find that higher SES Black and Native American individuals are more likely than White individuals of similar SES, to provide informal financial assistance to members of core discussion networks. Foreign-born Black and Hispanic individuals are significantly more likely to provide money to members of networks than their foreign-born White counterparts. Moving beyond previous research, this study demonstrates the nuanced patterns of financial giving, and how they vary by SES and nativity for Black and Hispanic individuals compared to White individuals. Advisor: Jeffrey A. Smith
... Additionally, studies have noted that African Americans and Hispanics are more likely than Whites to have disadvantaged kin members in need of assistance in the US, reflecting long-standing racial inequalities in the distribution of economic resources (Chiteji and Hamilton 2002;Fischer 1982;Heflin and Pattillo 2006;Tigges et al. 1998;Verdery and Campbell 2020). Members of those groups thus face more demands from relatives compared to Whites. ...
Article
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Credit card debt stands at over $1 trillion in the US and grows continuously. Scholars have argued that high (and growing) levels of credit card debt are attributable in part to rising economic vulnerabilities, combined with a thinning public safety net, credit cards being increasingly employed to make ends meet in this context. This paper extends this line of work by stressing that individuals and households do not rely on their credit cards only to mitigate their own financial hardships, but also those experienced by their non-coresidential kin members. More specifically, building on the notion that kin networks can constitute a source of negative social capital, we argue that individuals often accumulate credit card debt as they attempt to provide monetary assistance to their relatives in need. We also show that this effect is particularly strong in lower-income groups and in African American communities, in which need levels are especially high. Based on random and fixed effects analyses of data from the Panel Study of Income Dynamics, these insights extend scholarship on both kin networks of support and the sources of credit card debt.
... To explain causes of MDRs, scholars have studied the daily experiences of middle-class Black families (Chiteji & Hamilton, 2002;Weitzman, Byrd, & Auinger, 1999). Reviewing the work of the above-mentioned research on Black middle class suggests that middle-class non-Hispanic Black families experience their class and social status differently when compared to middle-class non-Hispanic White families (Hudson, Sacks, Irani, & Asher, 2020). ...
Article
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Background: Due to a pattern known as Marginalization-related Diminished Returns (MDRs), historically oppressed non-Hispanic Black Americans show weaker effects of economic status on health and development, when compared to socially privileged non-Hispanic White Americans. Such MDRs are also documented for the effects of economic status on the school performance of non-Hispanic Black children. However, the existing knowledge is minimal on similar diminished returns on children's intelligence. Aim: To compare racial and ethnic groups for the effect of subjective economic status on children's cognitive performance, we compared non-Hispanic White and non-Hispanic Black children for the effects of subjective economic status on children's matrix reasoning. Methods: This cross-sectional study included 7898 children from the Adolescent Brain Cognitive Development (ABCD) study. The predictor variable was subjective economic status, which was treated as a continuous measure. The primary outcome was children's matrix reasoning, a domain of cognitive performance, measured by the Wechsler Intelligence Scales for Children-IV (WISC-V) matrix reasoning total score. Results: Overall, high subjective economic status was associated with higher matrix reasoning score. Race showed a statistically significant interaction with subjective economic status on children's matrix reasoning score. This interaction suggested that high subjective economic status has a smaller boosting effect on increasing matrix reasoning score for non-Hispanic Black children relative to non-Hispanic White children. Conclusion: The degree by which subjective economic status correlates with matrix reasoning score, an important domain of cognitive performance, depends on race and racialization. Non-Hispanic Black children may show weaker gains in matrix reasoning from their subjective economic status than their non-Hispanic White counterparts. To minimize the racial gap in cognitive performance, we need to address diminished returns that occur as a result of the racialization of racial and ethnic minority children. Not only should we equalize economic status, but also increase the marginal returns of economic status for racial minorities, particularly non-Hispanic Black families. Such efforts require public policies that go beyond access and also consider how we can empower non-Hispanic Black communities and families so they can more effectively leverage and utilize their economic resources to secure measurable and tangible outcomes. Structural and societal barriers such as residential and school segregation may hinder non-Hispanic Black children from receiving the full effects of their family-level economic status on a variety of outcomes, including their cognitive performance.
... Scholars have recently studied the life experiences of middle-class Black families 156,157 . This research line has shown that middle-class families of color, particularly Blacks, experience their class and social status differently compared to their middle-class White counterparts. ...
Article
Background: In the United States, due to residential segregation, racial minorities and families with low socioeconomic status (SES) tend to live in less safe neighborhoods than their White and high SES counterparts. As such, in the US, race and SES closely correlate with neighborhood safety. Due to the high chronicity of stress in unsafe neighborhoods, perceived neighborhood safety may be a mechanism through which race and SES are linked to children's mental health. Simultaneously, race and SES may alter the effects of perceived neighborhood safety on children's mental health. Aim: To explore racial and SES differences in the effects of neighborhood safety on children's internalizing symptoms, we compared racially and SES diverse groups of American children for the effects of parents' perceived neighborhood safety on children's internalizing symptoms. Methods: This cross-sectional study included 10484 children from the Adolescent Brain Cognitive Development (ABCD) study. Mixed-effects regression was used for data analysis. The predictor variable was parents' perceived neighborhood safety which was treated as a continuous measure. The primary outcome was children's internalizing symptoms reported by children. Race, parental education, household income, and family structure were moderators. Results: Overall, the parents' high neighborhood safety was associated with lower levels of internalizing symptoms in children. Race and household income showed statistically significant interactions with subjective neighborhood safety on children's internalizing symptoms. Parents' perceived neighborhood safety showed a stronger inverse association with children's internalizing symptoms for Black than White families. Parents' perceived neighborhood safety showed a stronger inverse association with children's internalizing symptoms for high income than low-income families. Parental education or family structure did not show any significant interaction with parents' perceived neighborhood safety on children's internalizing symptoms. Conclusion: The degree to which neighborhood safety may be associated with children's internalizing symptoms may depend on race and household income. Some of the effects of race and SES on children's mental health outcomes may be due to interactions with contextual factors such as neighborhood safety. More research is needed on why and how diverse racial and SES groups differ in the association between perceived neighborhood safety and children's well-being.
... (16) They do mention the myriad of problems associated with imperfect information but not that information is costly to acquire, and this poses a huge obstacle to efficient outcomes and to human flourishing, particularly for those with low-income, inasmuch as they cannot afford to obtain sufficient information to make solid decisions. This is especially true in the presence of real uncertainty and when sequential complex decisions are involved (points 31, 33) (Akerlof 2002;Stiglitz 2009;Chiteji and Hamilton 2002;Greenwald and Stiglitz 1986). In turn, this Achilles heel of laissez faire, places poor people at a distinct disadvantage especially in the Information Age and implies that the poor are unable to make good decisions that would enable them to escape poverty and flourish (points 7, 8). ...
Article
In the view of Samuel Bowles and Wendy Carlin, macroeconomics 101 requires serious changes. They advocate instead the use of the new CORE textbook, The Economy, to which they contributed. The author suggests additional concepts to introduce to students at the beginning level for a balanced sense of the workings of the economic system, in this comprehensive analysis.
Article
Objectives The World Health Organization estimates that almost 300 million people suffer from depression worldwide. African Americans are understudied for depression-related phenotypes despite widespread racial disparities. In our study of African Americans, we integrated information on psychosocial stressors with genetic variation in order to better understand how these factors associated with depressive symptoms. Methods Our research strategy combined information on financial strain and social networks with genetic data to investigate variation in symptoms of depression (CES-D scores). We collected self-report data on depressive symptoms, financial strain (difficulty paying bills) and personal social networks (a model of an individual's social environment), and we genotyped genetic variants in five genes previously implicated in depressive disorders (HTR1a, BDNF, GNB3, SLC6A4, and FKBP5) in 128 African Americans residing in Tallahassee, Florida. We tested for direct and gene–environment interactive effects of the psychosocial stressors and genetic variants on depressive symptoms. Results Significant associations were identified between high CES-D scores and a stressful social environment (i.e., a high percentage of people in participants' social network who were a source of stress) and high financial strain. Only one genetic variant (rs1360780 in FKBP5) was significantly associated with CES-D scores and only when psychosocial stressors were included in the model; the T allele had an additive effect on depressive symptoms. Sex was also significantly associated with CES-D score in the model with psychosocial stressors and genetic variants; males had higher CES-D scores. No significant interactive effects were detected. Conclusions A stressful social environment and material disadvantage increase depressive symptoms in the study population. Additional associations with FKBP5 and male sex were revealed in models that included both psychosocial and genetic data. Our results suggest that incorporating psychosocial stressors may empower future genetic association studies and help clarify the biological consequences of social and financial stress.
Article
This Article identifies an important mechanism by which segregation arises in new residential developments. The Fair Housing Act and other antidiscrimination laws closely regulate real estate sales, advertising, and racial steering. As a result of these laws and other factors, home purchasers often lack accurate information about the likely demographic makeup of a new neighborhood or condominium building. Yet these laws have not eroded the incentives for housing consumers to obtain this data. This Article argues that developers circumvent fair housing laws by embedding costly, demographically polarizing amenities within a new development and recording covenants mandating that all homeowners Pay for those amenities. Its central claim is that developers will select common amenities not only on the basis of which amenities are inherently welfare-maximizing for the residents, but also on the basis of which amenities most effectively deter undesired residents from purchasing homes therein. The Article dubs this approach the exclusionary amenities strategy and shows how it causes sorting and focal point mechanisms to act in concert, thereby engendering substantial residential homogeneity. The inability to exclude functions as an inducement to spend. During the 1990s, the United States experienced a boom in the construction of residential developments built around costly golf courses. This occurred at a time when golf participation functioned as a noticeably better proxy for race than income, wealth, or virtually any other characteristic. Curiously, a substantial number of Americans who purchased homes in mandatory-membership golf communities played no golf This Article offers circumstantial evidence suggesting that by purchasing homes in these communities, homeowners may have been paying a premium for residential racial homogeneity. The Article then identifies a number of other examples where developers, or even municipalities, appear to be pursuing an exclusionary amenities strategy. It also identifies instances in which the use of exclusionary amenities may promote neutral, or even laudable, objectives. The Article then notes the possibility of inclusionary amenities, and shows how a few developers, common interest communities, and municipalities have used these amenities to achieve greater residential heterogeneity than would otherwise have been possible. It concludes by evaluating the law's current stance of leaving exclusionary amenities largely unregulated and examines various strategies to curb the use of problematic exclusionary amenities.
Chapter
Researchers began to explore the wealth holdings of households by race in the mid-1980s, when data became available for the first time. The magnitude and implications of these early findings were shocking: most found that, on average, black households owned only a dime for each dollar of wealth owned by white households (Lui, Robles, and Leondar- Wright 2006). This difference was much larger than the prevailing income gap of 60 cents-to-the-dollar. More alarmingly, the racial wealth gap has increased further since it was first analyzed. Our analysis reveals an increase of $151,000 in the absolute racial wealth gap between 1984 and 2009. This chapter empirically examines the main reasons behind the rise in the racial wealth gap over the past 25 years, deepening the analytic and policy understanding and narrative required to effectively disrupt and reverse this trend.
Article
La teoría económica predominante está repleta de supuestos que alimentan el racismo estructural o sistémico, pues apoya un sistema económico que perjudica gravemente a las personas del extremo inferior del espectro socioeconómico, que en Estados Unidos incluye a un número desproporcionado de hispanos, indígenas y descendientes de esclavos. El artículo analiza quince de estos supuestos que se suelen trivializar, incluido el papel crucial de los costos de información en la toma de decisiones. La información costosa implica que su adquisición por los pobres requiere una mayor proporción de su ingreso, lo que les dificulta tomar decisiones bien informadas.
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The relative importance of racial and class inequality in incarceration in the United States has recently become the subject of much debate. In this paper, we seek to give this debate a stronger empirical foundation. First, we update previous research on racial and class inequality in people’s likelihood of being imprisoned. Then, we examine racial and class inequality in people’s risk of having a family member imprisoned or living in a high-imprisonment neighborhood. We find that racial inequality in prison admissions has fallen in the twenty-first century, while class inequality has surged. However, in recent years, Black people with high levels of education and income were more likely than white people with low levels of education and income to experience the imprisonment of a family member or to live in a neighborhood with a high imprisonment rate. These seemingly contradictory conclusions can be reconciled by the fact that enduring structures of racial domination have made class boundaries among Black people more permeable than they are among white people. Imprisonment in the United States is increasingly reserved for the poor. But because Black Americans are disproportionately connected to the poor through their families and neighborhoods, racial inequality exceeds class inequality in people’s indirect experiences with imprisonment.
Article
In this article, I theorize the “financial toolkit” or the repertoires that inform financial decision‐making processes and explain why and what racial differences we should expect. I argue that while prior literature has focused on financial repertoires with large racial differences, we should expect both similar and distinct financial repertoires by race given that social networks and neighborhoods of residences are racially segregated, but mainstream media sources and national narratives create common financial discourses. Using data from the 2019 Survey of Consumer Finances, I show that while Black, Latinx, and White respondents all draw on social network and media sources for information about finances, that the financial practices they identify as ideal are only similar when articulated as broad, vague practices. Racial differences emerge among specific financial behaviors about how to engage with money. These findings contribute to our understandings of how culture contributes to the racial wealth gap, how institutions contribute to cultural toolkits, and how race informs behavior and decision‐making.
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Although Blacks in the United States suffered disproportionately high unemployment, housing and wealth losses during the Great Recession, little is known about the recession’s impact on Black entrepreneurship. This study uses data from the Panel Study of Income Dynamics (PSID) to estimate the difference in probability of starting a business before and after the recession for Black and White households. While the likelihood of starting a business declined for Whites after the Great Recession there were no statistically significant changes in the rate of firm startups among Blacks. Evidence supports the prosperity pull hypothesis for White but not Black entrepreneurs.
Article
Racial disparities in obesity are larger between Black and White college graduates compared to disparities among those who did not complete high school. A possible explanation is that Black adults with higher socioeconomic status (SES) experience unique obesogenic determinants. Black adults who have completed a 4-year college degree can report “uplift stress” from providing financial assistance to family members. The aim of this study is to determine whether the association between familial financial assistance and body mass index (BMI) varies among college-educated Black women and men. This study utilized data from an online survey of Qualtrics standing panels including 451 non-Hispanic Black college graduates. Respondents were asked if they had provided or received any monetary gift or financial help from a family member in the past 12 months as well as their height and weight. Using linear regression and multiplicative interaction terms, the association between familial financial assistance and BMI was assessed by sex. Those who reported both giving and receiving familial financial assistance had higher BMI than those who neither gave nor received assistance (β = 2.80, standard error (s.e.) = 1.16). There was a significant interaction such that this association was observed among women only (β = 6.67, s.e. = 2.32). Future studies should seek to understand the gendered impact of familial financial assistance on BMI in college-educated Black women.
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Financial socialization, or who and how individuals were influenced financially, while growing up, has an impact on their current financial literacy and well-being. Little is known about African Americans' financial socialization, so this study explored their financial socialization through the best and brightest of the community-educated African Americans; and then determine if the way in which they were socialized has an impact on their financial knowledge. The African American community is a heterogeneous community and differences in education levels would probably produce differences in financial outcomes. Primary data and 2015 FINRA survey data were used in this study. This study found that participants' top three financial influences were parents, followed by life experiences, and then formal influences. Furthermore, those who were financial socialization by self-directed influences were more likely to be more financially knowledgeable than those who were financially socialized by other informal influences.
Article
Wage inequalities between identical workers of different race, ethnicity, and gender are a persistent feature of labor markets. However, most labor market models either ignore important empirical evidence or focus very narrowly on specific labor market dynamics. To better understand such wage differences, we create a labor market model that integrates firm competition for workers, employee movement between jobs in response to market signals, potential monetary frictions in the job transition process, and workers' collective action which is a function of government support. Our model shows that because of gender- and race-specific historical and social outcomes, like the relatively lower household wealth of Black and Latino families and the increased household responsibilities of women, women and minority workers are more exploitable; employers can push their wage farther below the value of their marginal product. Also, our model shows that the cumulative wage gap for non-White women is greater than the additive gaps of being nonmale and non-White. Lastly, our model shows that a reduction in government support for collective action enables employers to wield monopsony power more freely, independent of changes in employer concentration. Because certain groups are more exploitable, employers' increased capability in wielding monopsony power means increased wage differentials replicating discriminatory biases against marginalized groups of workers.
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Previous work has found that predominantly Black and Hispanic neighborhoods continue to have less access to mainstream financial services and a greater prevalence of high-cost alternatives. Less attention has been dedicated to the other financial tools available to financially excluded households. Borrowing from friends and family is one widely used yet under-examined strategy for coping with emergency expenses. The literature provides preliminary evidence that informal borrowing and the costs of such borrowing are unequally distributed by race and gender. Drawing on data from the Survey of Household Economics and Decisionmaking, this article identifies predictors of planned informal borrowing use and examines whether this borrowing is symptomatic of financial exclusion using a bivariate probit model. Women of color are disproportionately likely to plan on using informal borrowing as their sole strategy for coping with an emergency expense. Black women in particular are twice as likely to do so as White respondents. While this informality occurs among the banked and unbanked, unobserved factors such as limited access to bank branches link financial exclusion and informal borrowing.
Article
Background: As shown by Minorities’ Diminished Returns (MDRs), ethnic minorities show weaker than expected effects of education level on health outcomes. However, this pattern is better demonstrated for health behaviors and health care utilization than satisfaction with care. Additionally, more is known about MDRs in African Americans than the Latino population. Thus, there is a need to study MDRs of education on healthcare satisfaction in highly educated African American and Latino individuals. Objectives: We tested ethnic differences in the association between education level and satisfaction with healthcare among American adults. Methods: The National Health Interview Survey (2015) included 24,835 adults who were Latino, non-Latino, African American, or White. The independent variable was education level. The dependent variable was satisfaction with healthcare. Age, gender, marital status, employment, region, physical health (self-rated health, and chronic diseases, body mass index), and mental health (psychological distress) were the covariates. Ethnicity was the moderator. Logistic regression was used for data analysis. Results: Higher education level was associated with higher satisfaction with healthcare in White but not African Americans. In the pooled sample, African American ethnicity showed a significant statistical interaction with education level suggesting a significantly smaller effect of high educational attainment on satisfaction with healthcare for African Americans than White adults. A similar interaction could not be found for Latino ethnicity, suggesting that education similarly enhances healthcare satisfaction for Latino and non-Latino adults. Conclusion: High education level boosts satisfaction with healthcare for Whites but not African Americans.
Article
Purpose The purpose of this paper is to examine wealth dynamics through the Great Recession along a dimension previously not studied, religious affiliation. Specifically, this paper analyzes wealth differentials and relative wealth losses among religious groups at the mean and along the wealth distribution before and after the Great Recession. Design/methodology/approach Drawing on data from the Panel Study of Income Dynamics and including a wide array of control variables, the paper analyzes the impact of religious affiliation groups on wealth pre- and post-Recession, using OLS, generalized least squares and quantile regression models. Findings The findings show that wealth differentials among religious groups exist both before and after the Recession and that wealth disparities are greater for people at the low end of the wealth distribution, who lost disproportionately more wealth across religious groups. Social implications The results suggest that the Great Recession further increased wealth inequality yet along another dimension, religious affiliation. These findings imply that in order to decrease wealth inequality and minimize other harmful effects of adverse macroeconomic events, religious institutions may provide education on financial management strategies, especially to those at the low end of the wealth distribution. Originality/value This paper is the first of its kind to build upon two bodies of literature: the research on religion and wealth and the research on wealth losses and the Great Recession. It is also the first paper to explore the religion–wealth relationship after the Great Recession and along the wealth distribution.
Article
Coresiding with extended relatives represents a beneficial form of resource sharing for disadvantaged individuals that is particularly common among Black, Hispanic, and low-socioeconomic status communities, yet we know little about financial arrangements within coresidential families. Given ongoing racial inequality in extended family resources, this study explores whether contributing rent is patterned by race among coresidential families. Using data from the Fragile Families and Child Wellbeing Study (N = 4,103), this project explores coresident and rent payment arrangements among mothers of young children. The analysis reveals that Black and Hispanic mothers carry unique financial burdens, being more likely, in comparison to White peers, to live with extended relatives and pay rent to the householder. Furthermore, among coresiders, Hispanic mothers are more likely than White mothers to pay rent even when the household is socioeconomically advantaged. This work reveals a form of inequality within coresidential housing, with White mothers having advantaged access to rent-free housing arrangements.
Article
This study examined racial and ethnic differences in the receipt and provision of instrumental family support. Extended families provide significant levels of emotional and instrumental support across the life course. Despite their importance, extended family relationships and the assistance they provide are largely neglected in the literature. Further, questions remain concerning cultural variation in family support relationships and inconsistent findings on racial differences in family support in prior investigations. This study relied on data from the National Survey of American Life‐Reinterview (n = 3483) to investigate the provision and receipt of instrumental support from extended family among African Americans, Black Caribbeans, and non‐Latino Whites and within high‐ and low‐income categories for each group. Eight key measures of instrumental family support are examined: receiving and providing transportation, help with chores, financial assistance, and help during an illness. African Americans and Black Caribbeans share similar profiles of providing and receiving instrumental family support. Both populations receive and provide assistance more frequently than do non‐Latino Whites. Similarly, analyses stratified by income indicated that for low‐income and high‐income groups, African American and Black Caribbeans are similar to one another, and at each income category, both groups received and provided support more frequently than non‐Latino Whites. Study findings are discussed in relation to conceptual and methodological differences in assessing Black–White differences across studies of family support. Attention to these issues and the specific contexts for receiving/providing family support (emergency vs. routine; intergenerational vs. extended) will help clarify inconsistent findings across studies.
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Demographic correlates of familial and nonfamilial sources of emergency assistance among blacks were examined with data from a national probability sample (Panel Study of Income Dynamics--1980). Both family and non-kin were found to be important sources of emergency assistance. Multivariate analyses revealed age, gender, marital status, and urban/rural differences in the source of emergency assistance. The findings highlighted the critical importance of the parent-child bond across the life course. The article concludes with a discussion of the practice implications of the findings.
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Based on the Survey of Consumer Finances, the distribution of wealth in the United States became much more unequal in the 1980s and that trend continued, albeit at a slower pace, in the 1990s. The only households that saw their mean net worth rise in absolute terms between 1983 and 1995 were those in the top 20 percent and the gains were particularly strong for the top one percent. All other groups were particularly strong for the top one percent. All other groups suffered real wealth losses, including the median household, and declines were particularly precipitous at the bottom. Racial disparities widened, and young households also lost out over this period. Copyright 1998 by American Economic Association.
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Washington: National Academy Press. Pattillo-McCoy, Mary. 1999. Black Picket Fences. Chicago: University of Chicago Press. Pattillo-McCoy, Mary and Heflin, Colleen. 1999. "Poverty in the Family: Exploring the Kin Networks of the Black and White Middle Class." Paper Presented at the American Sociological Association Meetings. Schoeni, Robert. 1992. "Essays on lnterhousehold Transfers and the Family." Ph.D. diss., University of Michigan. Stack, Carol. 1974. All Our Kin. New York: Harper & Row.
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