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Family Structure, Race, and Wealth Ownership: A Longitudinal Exploration of Wealth Accumulation Processes

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  • Lisa A. Keister

    (Ohio State University)

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    Abstract

    Researchers have documented racial inequalities in wealth ownership and have offered a variety of explanations to account for these differences. One potentially important contributing factor that has received little attention is racial differences in family structure. This paper explores racial differences in the structure of family of origin and family in adulthood and examines the impact of these differences on wealth accumulation patterns. Using the National Longitudinal Survey of Youth, I find that large family size and family disruptions in childhood are negatively associated with wealth accumulation, portfolio behavior, and wealth mobility in adulthood. My analyses suggest that family size is a more important factor determining wealth accumulation for whites than for blacks or Hispanics and that family disruption is most strongly related to wealth outcomes for Hispanics. I find that family structure in adulthood is only modestly associated with overall wealth but strongly related to portfolio behavior and wealth mobility and that these relationships are relatively fixed across racial groups. My findings lend support to arguments about the importance of the role that resource dilution plays in determining life outcomes. They also suggest that efforts to reduce racial inequality in wealth ownership may be most effective if they seek to reduce the impact of deprivation early in life.

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    File URL: http://128.118.178.162/eps/mac/papers/0004/0004051.pdf
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    Bibliographic Info

    Paper provided by EconWPA in its series Macroeconomics with number 0004051.

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    Length: 33 pages
    Date of creation: 25 Oct 2000
    Date of revision:
    Handle: RePEc:wpa:wuwpma:0004051

    Note: Type of Document - Adobe Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 33; figures: included
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    Web page: http://128.118.178.162

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    1. F. Thomas Juster & James P. Smith & Frank Stafford, 2004. "The Measurement and Structure of Household Wealth," Labor and Demography 0402009, EconWPA.
    2. Arthur B. Kennickell & Martha Starr-McCluer & Annika E. Sunden, 1997. "Family finances in the U.S.: recent evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 1-24.
    3. Stafford, Frank P, 1987. "Women's Work, Sibling Competition, and Children's School Performance," American Economic Review, American Economic Association, vol. 77(5), pages 972-80, December.
    4. Zagorsky, Jay L, 1999. "Young Baby Boomers' Wealth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 135-56, June.
    5. Frank P. Stafford & Ngina S. Chiteji, 1999. "Portfolio Choices of Parents and Their Children as Young Adults: Asset Accumulation by African-American Families," American Economic Review, American Economic Association, vol. 89(2), pages 377-380, May.
    6. Blau, Francine D & Graham, John W, 1990. "Black-White Differences in Wealth and Asset Composition," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 321-39, May.
    7. Greg J. Duncan & Saul D. Hoffman, 1985. "Economic Consequences of Marital Instability," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 427-470 National Bureau of Economic Research, Inc.
    8. Hill, C Russell & Stafford, Frank P, 1978. "Intergenerational Wealth Transfers and the Educational Decisions of Male Youth: An Alternative Interpretation," The Quarterly Journal of Economics, MIT Press, vol. 92(3), pages 515-20, August.
    9. Kerwin Kofi Charles & Erik Hurst, 2002. "The Transition To Home Ownership And The Black-White Wealth Gap," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 281-297, May.
    10. Mary Corcoran & Greg J. Duncan, 1979. "Work History, Labor Force Attachment, and Earnings Differences between the Races and Sexes," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 3-20.
    11. Edward N. Wolff, 1998. "Recent Trends in the Size Distribution of Household Wealth," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 131-150, Summer.
    12. Menchik, Paul L & Jianakoplos, Nancy Ammon, 1997. "Black-White Wealth Inequality: Is Inheritance the Reason?," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 428-42, April.
    13. F. Thomas Juster & Kathleen A. Kuester, 1990. "Differences in the measurement of wealth, wealth inequality, and wealth composition obtained from alternative U.S. wealth surveys," Finance and Economics Discussion Series 116, Board of Governors of the Federal Reserve System (U.S.).
    14. Judith Blake, 1981. "Family size and the quality of children," Demography, Springer, vol. 18(4), pages 421-442, November.
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    Cited by:
    1. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth of Mexican Americans," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    2. Belton, Willie & Uwaifo Oyelere, Ruth, 2008. "The Racial Saving Gap Enigma: Unraveling the Role of Institutions," IZA Discussion Papers 3545, Institute for the Study of Labor (IZA).
    3. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth And Asset Holdings Of U.S.-Born And Foreign-Born Households: Evidence From Sipp Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 17-42, 03.

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