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The Racial Wealth Gap in America: Asset Types Held by Race

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Racial Wealth Gap

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The Racial Wealth Gap

People of color have faced economic inequality for generations, and the recent wave of Black Lives Matter protests has renewed discussions on these disparities.

Compared to White families, other races have lower levels of income and net worth. They are also less likely to hold assets of any type. In fact, 19% of Black families have zero or negative net worth, while only 9% of White households have no wealth.

Today’s chart uses data from the U.S. Federal Reserve’s triennial Survey of Consumer Finances to highlight the racial wealth gap, and the proportion of households that own different kinds of assets by racial group.

Asset Types Held By Race

The financial profile between racial groups varies widely. Below is the percentage of U.S. families with each type of asset, according to the most recent survey from 2016.

WhiteBlackHispanicOther
Primary Residence73%45%46%54%
Vehicle90%73%80%80%
Retirement Accounts60%34%30%48%
Family-owned Business Equity15%7%6%13%
Publicly-traded Stocks61%31%28%47%

Vehicles are the most common asset across all racial groups, followed by a primary residence.

However, the level of equity—or home value less debts—families have in their houses differs by race. White families have equity of $215,800, whereas Black and Hispanic households have net housing wealth of $94,400 and $129,800 respectively.

In addition, White households are more likely to hold financial assets such as retirement accounts, family businesses, and stocks. These assets are instrumental in building wealth, and are prominent in the wealth composition of America’s richest families.

With fewer people of color holding these assets, they miss out on higher average returns than low-risk assets, as well as the power of compound interest. These portfolio differences are striking, but they are not the most important contributing factor in the racial wealth gap.

Demographic and Economic Variations

White households are also more likely to have demographic characteristics that are associated with wealth. According to the U.S. Federal Reserve, they are:

  • Older, with more than half of households age 55 and up
  • More highly educated, with 51% having some type of degree
  • Less likely to have a single parent
  • More likely to have received an inheritance

For example, 39% of White heads of households have a bachelor’s degree or higher, compared to 23% and 17% for Black and Hispanic household heads, respectively. However, education doesn’t fully explain the wealth inequities.

Racial Wealth Gap by Education

Enormous wealth disparities exist between families with the same education level. Even in cases where Black and Hispanic household heads have obtained a bachelor’s degree, their families’ median wealth of $68,000 and $78,000 respectively is still lower than the $98,000 median wealth for White families where the head has no bachelor’s degree.

After accounting for demographic factors, researchers still found there were considerable inequities. What, then, could be primarily responsible for the racial wealth gap?

The Income Gap

While previous research found that the wealth gap is “too big” to be explained by a difference in income, a recent study from the Federal Reserve Bank of Cleveland offers a new perspective. Focusing on White and Black U.S. households only, researchers analyzed the dynamics of wealth accumulation over time, as opposed to previous studies that considered short time periods.

They found that income inequality was the primary contributor to the racial wealth gap. According to the model, if Black and White households had earned the same labor income from 1962 onwards, the Black-to-White wealth ratio would have reached 0.9 by 2007.

Moving forward, the study concludes that policy changes will likely have a positive impact if they address issues contributing to income gaps. This includes reducing racial discrimination in the labor market, and creating programs, such as mentorships, that improve environments for specific racial subgroups.

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Ranked: The Countries Receiving the Most Remittances From Abroad

The top 10 countries by money received from abroad have seen a major shift through the years. Only three have stayed put.

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A cropped chart with the top countries by money received from abroad, in current U.S. dollars, based on 2000-2023 data from Knomad.

The Countries Receiving the Most Remittances From Abroad

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

We chart the top countries by money received from abroad, in current U.S. dollars, based on 2000-2023 data from Knomad.

Specifically, these transfer totals shown represent personal remittances, or money sent between residents and non-residents, including personal transfers and compensation for work done abroad. It does not include, and is separate from, foreign investment.

Top 10 Countries by Personal Remittances Received (2000-2023)

The Indian diaspora—measuring nearly 18 million people—collectively sent more than $125 billion back to the country in 2023. In fact, India became the first country to ever receive more than $100 billion in personal remittances in 2022.

Top Countries Receiving
Money From Abroad
2000 Top Countries Receiving
Money From Abroad
2023e
🇮🇳 India$13B🇮🇳 India$125B
🇫🇷 France$9B🇲🇽 Mexico$67B
🇲🇽 Mexico$8B🇨🇳 China$50B
🇵🇭 Philippines$7B🇵🇭 Philippines$40B
🇬🇧 UK$5B🇫🇷 France$34B
🇹🇷 Türkiye$5B🇵🇰 Pakistan$24B
🇰🇷 South Korea$5B🇪🇬 Egypt$24B
🇺🇸 U.S.$4B🇧🇩 Bangladesh$23B
🇵🇹 Portugal$4B🇳🇬 Nigeria$21B
🇩🇪 Germany$4B🇬🇹 Guatemala$20B

Note: 2023 figures are estimates. All numbers rounded.

For context, India’s remittances received adds to more than the next two countries, Mexico ($67 billion) and China ($50 billion) combined.

Meanwhile, over the last two decades, the top 10 has seen a major shift. Countries from Europe have fallen out, replaced by Asian and African countries with big diaspora communities.

And the countries they’ve replaced—France, UK, Germany—are now some of the top destinations for immigration, from where remittances are usually sent.

The UN states that at least one in nine people globally are supported by funds received from abroad, and half of the amount ends up in rural areas, where some of the world’s poorest people live. This also makes remittances three times more important than international aid.

On a global scale, personal inbound remittances have risen seven times between 2000 and 2023.

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