Affordable Housing, Community Development, Reports and Publications

Income Inequality Has Grown in Past 25 Years

Institute on Assets and Social Policy (IASP) at Brandeis University
 

The wealth gap between white and African American families increased from $85,000 in 1984 to $236,500 in 2009 according to a new report, The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide. The Institute on Assets and Social Policy and Brandeis University conducted a first of its kind study where they tracked 1,700 working-age households over the course of 25 years from 1984-2009 and documented the change in their wealth.

The study found five “fundamental factors” that drove the racial wealth gap:

  • Years of homeownership
  • Average family/household income
  • Employment stability  (unemployment)
  • College education
  • Family financial support, inheritance and preexisting family wealth

The median net worth of white households in the study has grown to $265,000 over the 25-year period compared with just $28,500 for the black households. The study indicates that an individual’s personal choices play a smaller role in the opportunities they have for success than the established policies and institutional practices that they encounter throughout their lives.

Homeownership plays a large role in the income gap. Not only do white families buy homes eight years earlier than black families, they also have the ability to make larger down payments on the homes, allowing for a lower interest rate for their mortgages.

Much work needs to be done to promote the homeownership rate among black households which is 28 percent lower than white households.

Click here
to read the press release.
Visit the IASP website to view the full report The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide.
 

 
 

Filter News By