After centuries of discrimination and economic exclusion, the US racial wealth gap remains stubbornly large. In our latest paper studying Americans born in the 1940s through 1960s, we show that the median white American in their early thirties had $29,000 more wealth than the median Black American of the same age. This racial wealth gap is even greater among older adults: the median white American in their late fifties had $251,000 more wealth than the median Black American. This is not just because initial wealth gaps compounded over time. As we show, even conditional on having the same wealth in their early thirties, white Americans reach a significantly higher wealth rank by their late fifties than Black Americans.

On top of having less wealth than white Americans to begin with, Black Americans are both less likely to move up the economic ladder and more likely to slide down it. Figure 1 shows the estimated wealth percentile attained by Black and white Americans by their late fifties, starting from the 10th, 25th, 50th, 75th, or 90th wealth percentiles We compare people to others their age who were born around the same time. 

Both Black and white Americans who have 10th or 25th percentile wealth in their early thirties are expected to improve their wealth position in their late fifties. However, Black Americans’ wealth status rises at a notably lower rate. For instance, Black Americans at the 10th percentile in their early thirties are expected to reach the 24th percentile in their late fifties — 13 percentiles lower than white Americans, who are expected to reach the 37th percentile.  

As the chart shows, wealth status is even stickier at the top end of the distribution; the wealthy are unlikely to fall too far. But this “glass floor” effect varies by race. Black Americans who have high wealth are much more likely to lose ground than white Americans with the same wealth. For example, among those who start with wealth at the 90th percentile, Black Americans have much lower wealth in their late fifties (51st percentile) than white Americans (77th percentile). 

Read the full article about racial wealth mobility by Ember Smith, Ariel Gelrud Shiro, Christopher Pulliam, and Richard V. Reeves at Brookings.