How Does Social Security Affect the Racial Wealth Gap?

Published: 2022
Project ID: UM22-10


The literature on the United States’ wealth inequality has three major shortcomings. First, the literature is focused on wealth concentration at the very top, ignoring differentials across most of the wealth distribution. Second, the literature mostly ignores the wealth differentials by race and ethnicity that remain after controlling for other observables. Third, the literature is mostly focused on the narrow measure of household net worth available in household surveys. This research project addresses these three shortcomings using multiple survey and administrative data sources and a conceptual wealth measurement framework that includes Social Security taxes and benefits (Sabelhaus and Volz 2021). In addition to developing more comprehensive measures of wealth inequality by race and ethnicity across the wealth distribution and over the life cycle, it is important from a policy perspective to analyze how factors that vary with race and ethnicity — such as marriage patterns, family structure, job types, lifetime work patterns, and disability — interact with Social Security rules to determine taxes and benefits.



John Sabelhaus