IDEAS home Printed from https://ideas.repec.org/a/bla/finrev/v61y2026i1p121-133.html

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/fire.70010
    Download Restriction: no
    File URL: https://libkey.io/10.1111/fire.70010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Guangyi N. Wang & Sherman D. Hanna, 2019. "Racial/Ethnic disparities in high return investment ownership: a Heckman selection model," Applied Economics Letters, Taylor & Francis Journals, vol. 26(2), pages 111-115, January.
    2. Dionissi Aliprantis & Daniel R. Carroll, 2019. "What Is Behind the Persistence of the Racial Wealth Gap?," Economic Commentary, Federal Reserve Bank of Cleveland, issue February.
    3. Nadia Karamcheva & Victoria Perez-Zetune, 2023. "Defined Benefit and Defined Contribution Plans and the Distribution of Family Wealth: Working Paper 2023-02," Working Papers 58305, Congressional Budget Office.
    4. Karl David Boulware & Kenneth N. Kuttner, 2020. "Wealth Stratification and Portfolio Choice," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 411-415, May.
    5. Hero Ashman & Seth Neumuller, 2020. "Can Income Differences Explain the Racial Wealth Gap: A Quantitative Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 35, pages 220-239, January.
    6. James Heckman, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    7. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jermaine Toney, 2022. "Is there wealth stability across generations in the U.S.? Evidence from panel study, 1984–2017," Contemporary Economic Policy, Western Economic Association International, vol. 40(4), pages 551-567, October.
    2. Job Boerma & Loukas Karabarbounis, 2023. "Reparations and Persistent Racial Wealth Gaps," NBER Macroeconomics Annual, University of Chicago Press, vol. 37(1), pages 171-221.
    3. Darima Fotheringham & Michael A. Wiles, 2023. "The effect of implementing chatbot customer service on stock returns: an event study analysis," Journal of the Academy of Marketing Science, Springer, vol. 51(4), pages 802-822, July.
    4. Robert B. Ekelund & John D. Jackson & Robert D. Tollison, 2013. "Are Art Auction Estimates Biased?," Southern Economic Journal, John Wiley & Sons, vol. 80(2), pages 454-465, October.
    5. Song, Wei-Ling & Uzmanoglu, Cihan, 2016. "TARP announcement, bank health, and borrowers’ credit risk," Journal of Financial Stability, Elsevier, vol. 22(C), pages 22-32.
    6. Xu, Shen & Yin, Bichao & Lou, Chunjie, 2022. "Minority shareholder activism and corporate social responsibility," Economic Modelling, Elsevier, vol. 116(C).
    7. Saziye Gazioglu & Aysit Tansel, 2006. "Job satisfaction in Britain: individual and job related factors," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1163-1171.
    8. Raymundo M. Campos-Vazquez, 2013. "Efectos de los ingresos no reportados en el nivel y tendencia de la pobreza laboral en México," Serie documentos de trabajo del Centro de Estudios Económicos 2013-04, El Colegio de México, Centro de Estudios Económicos.
    9. Ichev, Riste & Valentinčič, Aljoša, 2025. "The effect of impact investing on performance of private firms," Research in International Business and Finance, Elsevier, vol. 73(PA).
    10. Stephen Brown & William Goetzmann & Bing Liang & Christopher Schwarz, 2008. "Mandatory Disclosure and Operational Risk: Evidence from Hedge Fund Registration," Journal of Finance, American Finance Association, vol. 63(6), pages 2785-2815, December.
    11. Fabrizio Rossi & Maretno Agus Harjoto, 2020. "Corporate non-financial disclosure, firm value, risk, and agency costs: evidence from Italian listed companies," Review of Managerial Science, Springer, vol. 14(5), pages 1149-1181, October.
    12. Claudio A. Agostini & Marcela Perticara & Javiera Selman, 2023. "Tackling Vulnerable Households through a Working Tax Credit Scheme: A Feasible Alternative to Cash Transfers," Hacienda Pública Española / Review of Public Economics, IEF, vol. 245(2), pages 119-155, June.
    13. Castagnetti, Carolina & Rosti, Luisa, 2010. "Gender stereotyping and wage discrimination among Italian graduates," MPRA Paper 26685, University Library of Munich, Germany.
    14. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    15. Chia-Ling Chao & Shwu-Min Horng, 2013. "Does the SEC's Waiver of IFRS to U.S. GAAP Reconciliation Improve the Quality of Financial Reporting?," Accounting and Finance Research, Sciedu Press, vol. 2(3), pages 1-78, August.
    16. Jean-Louis Arcand & Linguère M'Baye, 2013. "Braving the waves: the role of time and risk preferences in illegal migration from Senegal," CERDI Working papers halshs-00855937, HAL.
    17. Emily Ouma & John Jagwe & Gideon Aiko Obare & Steffen Abele, 2010. "Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 111-122, March.
    18. Boubakri, Narjess & Ghouma, Hatem, 2010. "Control/ownership structure, creditor rights protection, and the cost of debt financing: International evidence," Journal of Banking & Finance, Elsevier, vol. 34(10), pages 2481-2499, October.
    19. Sandra Müllbacher & Wolfgang Nagl, 2017. "Labour supply in Austria: an assessment of recent developments and the effects of a tax reform," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 465-486, August.
    20. Ray, Jayant & Rivera-Batiz, Francisco L., 2002. "An Analysis of Sample Selection Bias in Cross-Country Growth Regressions," MPRA Paper 114753, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:finrev:v:61:y:2026:i:1:p:121-133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/efaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.