Racial Differences in Wealth Composition and the Intergenerational Transmission of Wealth across Generations
Janeria A Easley, Princeton University
As wealth continues to be central to the intergenerational persistence of socio-economic status, understanding its intergenerational transmission is central to the study of racial differences in social mobility. This study aims to examine whether there are racial differences in wealth mobility and transmission. Using data on parental wealth in 1984 and adult child wealth from 1999 to 2011 from the Panel Study of Income Dynamics (PSID), this study uses OLS regression to show that, racial differences in the transmission of wealth are modest. With that said, there is not evidence that black and white families with similar levels of wealth transmit that wealth to the next generation at a different rate than that of whites. However, the intergenerational wealth elasticity seems to be insufficient in documenting disparities in the relationship between parent wealth and child wealth. This paper does highlight racial differences in wealth mobility, though disparities are largely explained by adult child SES.