The Heller School for Social Policy and Management

Racial Wealth and Economic Equity

IASP's work around racial wealth and economic equity demonstrates that inequality is not merely about access to resources and assets—rather, similar accomplishments in homeownership, income, and college education convert to financial gain differentially by race. This is because substantial racial wealth gaps among younger adults grow dramatically over the life course as white families leverage their head-start assets.

Findings like this emphasize the importance of policy changes rather than behavioral changes in the broader effort to build an inclusive economy. Increasingly, IASP has helped the assets field to move beyond a narrow focus on family wealth and toward broader analyses related to the impact of policies on the wealth-building opportunities of specific populations.  

As a response to larger research findings, IASP has partnered with community organizations to perform evaluations of grassroots programs which aim to close the racial wealth gap.

IASP research in Racial Wealth and Economic Equity addresses many areas including the racial wealth gap, the racial wealth audit, retirement security, middle class security, children's savings accounts, financial education and empowerment. 

Significant findings in the area of Racial Wealth and Economic Equity include:

Policy drives the racial wealth gap. 

Analysis of the Mortgage Interest Deduction, one of the largest tax benefits available to households in the U.S., shows that White households benefit disproportionately more compared to households of color. If these benefits were distributed equally, then Black Americans would receive more than twice the benefit they currently receive. 

(Accessible description of mortgage interest deduction graph)


Occupational segregation effects on wages and wealth.

IASP's “Not Only Unequal Paychecks” report reveals how Blacks and Latinos have significantly lower pay and wealth than their White peers with similar educational backgrounds in finance, construction, healthcare, and STEM. While wealth increases for all in more highly-compensated sectors, the gains from entering a higher-paying field are not shared equally.

 

(Accessible description of occupational segregation wealth graph)

 

 


Expanding college access is not a panacea for reducing racial wealth inequalities. 

Analysis of college-educated families shows that while higher educational attainment leads to greater wealth for households in general, young black households are more likely than their white peers to take on student loan debt and that wealth disparities are substantial among college-educated white and black Households.

(Accessible description of the wealth gap graph)

 

Related Topics

 

Racial Wealth Audit™

The Racial Wealth Audit™ serves as a policy analysis tool to help better understand how a policy or program may impact the racial wealth gap. IASP research has notably revealed the importance of policy as a key driver of widening racial and ethnic wealth inequalities, highlighting that policy can both exacerbate and combat wealth disparities. Some well-intentioned policies have had unwittingly negative impacts on the racial wealth gap. Frequently, policy impacts on the racial wealth gap are and have been unintended consequences of policy design, rather than being explicitly part of policy efforts.

 

Children's Savings Accounts (CSA)

CSAs are programs that provide children with savings and/or investment accounts, intended for post-secondary education (or other asset-building) and which provide direct, monetary incentives for savings. High tuition costs can discourage families and dampen children’s educational ambitions from an early age. Children’s Savings Accounts (CSAs) can help families to see higher education as an achievable goal. Click here for more information on IASP's CSA research.