Quantifying Specific and Systemic Factors in the Black-White Wealth Gap in the United States

Abstract This paper provides a new quantitative analysis of the role of specific and systemic factors in racial wealth disparities in the United States. Specific or individual factors include characteristics such as education, occupation, homeownership, and inheritance. Systemic factors can be reflected in unexplained racial differences, or by considering the effect of differences in characteristics when taken together. Utilizing the 2016 Survey of Consumer Finances and different approaches to estimating the effects of various characteristics, we argue that measured individual characteristics are limited in their ability to explain much of the Black-White wealth gap in the US. Quantile regressions find that the racial wealth gap exists within comparable segments of the wealth distribution, and also suggest that race matters, beyond measured characteristics.