The Decline of African-American and Hispanic Wealth since the Great Recession

Edward N. Wolff

NBER Working Paper No. 25198
Issued in October 2018
NBER Program(s):Labor Studies Program, Productivity, Innovation, and Entrepreneurship Program

The ratio in standard net worth NW between African-Americans and (non-Hispanic) whites was the same in 2007 as in 1983 (0.19) but then fell to 0.14 in 2016, while that between Hispanics and whites climbed from 0.16 to 0.26 but then plunged to 0.19. Minorities had much higher debt-net worth ratios in 2007 – 0.55 for blacks, 0.51 for Hispanics, and 0.18 for whites. Minorities also had a higher share of assets in homes than whites – 0.54 and 0.53 versus 0.31. Decomposition analysis reveals that the lower return on wealth for minorities explained a large share of the widening wealth gap between 2007 and 2010. From 2010 to 2016, the return was higher for minorities but this was offset by larger dissavings. Adding pension and Social Security wealth to standard wealth substantially lowers the wealth gap. The racial ratio of mean augmented wealth AW (net worth, pension, and Social Security wealth) was 0.27 in 2016 and the ethnic ratio was 0.28. The racial gap was the same in 2016 as in 1989, while the ethnic ratio increased from 0.25 to 0.28. In 2016, NW inequality was considerably higher for blacks and Hispanics than whites (by 0.120 and 0.093 Gini points, but AW inequality was considerably lower (by 0.098 and 0.067 points). While AW inequality increased by 0.067 Gini points for whites from 1989 to 2016, it fell by 0.046 points for blacks and by 0.015 points for Hispanics. Social Security was the principal factor.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w25198

NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us