Economic Snapshot | Race and Ethnicity

Receiving an inheritance helps white families more than black families

I recently wrote about how destructive social policy has created and maintained the racial wealth gap leaving African-Americans without the materials to build wealth. But just how important is it to start with the building blocks of wealth? Individuals that start life with little or no wealth are often trapped at the bottom of the wealth distribution for their entire lives. More than half of white families end up with more wealth than their parents, while only 23 percent of blacks are able to do the same.

The figure below shows median wealth for households with and without an inheritance. White families are twice as likely to receive an inheritance as black families, and that inheritance is nearly three times as much. Even among black families who inherit wealth, the racial wage gap is much larger, compared to white families who inherit wealth. For families with an inheritance, median white wealth is 7.5 times larger than for black families. Comparatively, white families have 5.4 times more wealth than black families without an inheritance. The importance of inheritances to the wealth position of white families is staggering. At the median, an inheritance increases wealth by more than $100,000 for white families and only $4,000 for black families.

Economic Snapshot

Receiving an inheritance helps white families more than black families: Median family wealth by race and whether the family received an inheritance

White Black
Families without an inheritance $183,050 $33,969 
Families with an inheritance $287,457 $38,174
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The data below can be saved or copied directly into Excel.

Source: Thompson, Jeffrey P. and Gustavo A. Suarez (2015). “Exploring the Racial Wealth Gap Using the Survey of Consumer Finances,” Finance and Economics Discussion Series 2015-076. Washington: Board of Governors of the Federal Reserve System, http://dx.doi.org/10.17016/FEDS.2015.076.

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Professors William Darity and Darrick Hamilton have found that “inheritance, bequests and in-vivo transfer account for more of the racial wealth gap than any other behavioral, demographic or socioeconomic indicator.” White households inherit more money, and more often, than black households. Being lucky enough to receive an inheritance should not be a determining factor of achieving the ever-elusive American dream.


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