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Inequity in Equities: What Explains the Black–White Gap in Equity Market Participation?

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  • John D. Burger
  • Jeremy S. Schwartz

Abstract

We analyze the racial gap in equity market participation using a two‐part fractional regression and find that defined contribution (DC) plans provide a particularly powerful gateway to equities for Black households. Using a nonlinear decomposition, the Black–White gap is largely explained by differential endowments: foremost lower DC plan participation among Black households. Further analysis reveals that lower DC plan participation by Black households is driven primarily by limited access rather than participation decisions. More speculatively, labor market discrimination impeding Black households’ access to jobs that offer DC plans could reduce participation in equity markets.

Suggested Citation

  • John D. Burger & Jeremy S. Schwartz, 2026. "Inequity in Equities: What Explains the Black–White Gap in Equity Market Participation?," The Financial Review, Eastern Finance Association, vol. 61(1), pages 121-133, February.
    • Handle: RePEc:bla:finrev:v:61:y:2026:i:1:p:121-133
    DOI: 10.1111/fire.70010
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