Ellora Derenoncourt on the US Racial Wealth Gap

This Social Science Bites podcast offers a dollop of good news and heaping helping of bad. The good news is that since the end of American Civil War the economic condition of Back Americans has improved, using as a comparison the presumed status quo population of white Americans. According to Princeton University economist Ellora Derenoncourt, this "wealth gap" has fallen from 60-to-one to six-to-one in the intervening 160 years. While that's heartening, as Derenoncourt details for interviewer David Edmonds, that six-to-one gap hasn't budged since the 1950s. The academic, the founder and faculty director for Princeton's Program for Research on Inequality, breaks down that stall using historical data, parsing out differences between classes and also discussing the difference between income and assets. "Income," she notes, "has its own growth process, and income between the two groups has been converging over the last 150 years, and savings from income helped Black Americans accumulate some wealth, driving the racial wealth gap down." But as incomes came closer, accumulated assets and the wealth derived from that have only inched closer, driven in part by generational wealth, especially in housing. "[F]or most Americans, housing is their wealth," she explains. "And we can keep going down the distribution to ask, '"'When is it the case that white Americans at this point in the distribution are mostly renters versus homeowners?'"' That's where we're going to start to see these dynamics of the wealth gap shift. Derenoncourt closes with some policy ideas that could accelerate closing the gap, including the politically hot topic of slavery reparations.