When The Rich Don’t Get Richer

Wealth And Race

Kevin Hartnett highlights a paper from Rourke O’Brien arguing that the wealth gap between black and white families can be partially explained by the generosity of middle and upper-income blacks:

Middle-income blacks are more than twice as likely as middle-income whites to have a poor sibling and more than four times as likely to have parents below the poverty line. And because of these relationships, they’re called upon more often to provide financial assistance.

This chart from O’Brien’s paper shows the magnitude of the difference. Black families earning more than $100,000 a year are about twice as likely to have given money to friends and family compared to white families.

These transfers of money can have a big impact on wealth accumulation.