One of the most astounding economic statistics is the wealth gap between black and white Americans. According to a Pew Research Center analysis of government data from 2009, the total wealth (assets minus debts) of the typical black household was $5,677 while the typical white household had $113,149. Why is the median wealth of white households 20 times that of black households?
Plummeting house values were the principal cause, says Pew Research. Among white homeowners, the decline was from $115,364 in 2005 to $95,000 in 2009 and among black homeowners, it was from $76,910 in 2005 to $59,000 in 2009. The fact that only 46% of black Americans own a home, compared to a homeownership rate of 76% for whites likely affect the gap too.
But in a paper published last month, Princeton graduate student Rourke O’Brien suggests another reason: the generosity of black families.