Posts tagged with: Tax policy and economic inequality in the United States

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?

racial-wealth-gapPlummeting 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.
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