Black households in the U.S. have, on average, considerably less wealth than white households. Why hasn't this gap closed over the past half century, even with the passage of civil rights legislation? Researchers at the Federal Reserve Bank of Cleveland
have found that, together with barriers including discrimination, the primary driver maintaining the wealth gap is that the earning power of blacks in the labor market continues to trail that of whites.
That’s contrary to other studies which generally concluded that the wealth gap was “too big” to be explained by differences in income.
- How can economics inform us about racial inequities in wealth accumulation?
- Why has the wealth gap between blacks and whites persisted?
- What can be done and how long will it take to actually close the wealth gap if we maintain the current course?