Gittleman, Maury, and Edward N. Wolff. 2004. "Racial Differences in Patterns of Wealth Accumulation." Journal of Human Resources 39(1): 193-227.

Making use of PSID data for 1984, 1989, and 1994, we examine race differences in patterns of asset accumulation. Our results indicate, as expected, that inheritances raise the rate of wealth accumulation of whites relative to that of African Americans. But, while whites devote a greater share of their income to saving, racial differences in saving rates are not significant, once we control for income. Though our results may be period-specific, we also do not find evidence that the rate of return to capital is greater for whites than for African Americans. Simulations suggest that African Americans would have gained significant ground relative to whites during the period if they had inherited similar amounts, saved at the same rate, had comparable income levels and, more speculatively, had portfolios closer in composition to those of whites.

Maury Gittleman is a research economist at the U.S. Bureau of Labor Statistics. Edward N. Wolff is a professor of economics at New York University. Earlier versions of this paper were presented at the session "Ethnicity, Race, and Socioeconomic Outcomes" at the Annual Meeting of the Population Association of America, Los Angeles, March 23-25, 2000, and at the conference on "Saving, Intergenerational Transfers, and the Distribution of Wealth" at the Jerome Levy Economics Institute of Bard College, June 7-9, 2000. We thank the coeditor, three anonymous referees, Maureen Conway, Richard Curtin, Keenan Dworak-Fisher, Brooks Pierce, and participants in both conferences for helpful discussions and comments. Any views expressed are those of the authors and should not be attributed to the Bureau of Labor Statistics or the Department of Labor. Edward Wolff would like to gratefully acknowledge financial support provided by the Ford Foundation. The data used in this article can be obtained August 2004 through July 2007 from Maury Gittleman, gittleman_m@bls.gov.

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