The Impacts of Racial Differences in Economic Challenges on Housing, Wealth, and Economic Security Among OASI Beneficiaries

Housing wealth comprises 40 percent of the net wealth of retirement-age Americans, 43 percent of whom have not yet paid off their mortgages. This report analyzes two research questions. First, we evaluate the extent to which Old-Age and Survivors Insurance (OASI) benefits advance economic security and racial equity among homeowners. Our use of linked administrative data facilitates a comparative analysis of economic well-being measures before and after homeowners became eligible for OASI benefits. Second, we analyze how racial disparities in job losses during working years contribute to racial differences in economic security at retirement, focusing particularly on exposure to distressed home sales. Utilizing confidential taxpayer microdata, we assess racial discrepancies in the incidence of job loss, distressed sales, and wealth destruction due to distressed sales. Our findings imply that racial/ethnic differences in wealth at retirement are at least partly attributable to differences in labor market experiences. In terms of policy implications, our findings provide support for policies that mitigate employment and income instability during working years. Such policies are likely to have effects that accumulate throughout the life cycle and can mitigate racial/ethnic differences in wealth at retirement.