UM24-07: The Color of Wealth in Chicago: Wealth Disparities by Race and Ethnicity
Researchers
Abstract
In the U.S., the average Black and Hispanic or Latino household owns about 15% to 20% as much net wealth as the average white household. An in-depth understanding of the barriers to wealth accumulation among people of color is an urgent policy concern to break cycles of financial vulnerability that extend to advanced ages. This project will analyze unusually rich and freshly collected data on the “Color of Wealth” (COW) from the Chicago area, the nation’s third largest metropolitan area. The Chicago’s population is not only diverse, but also one of the most segregated, both economically and by race and ethnicity. The content of the Chicago COW survey was developed with input from the Chicago Community Trust (CCT). It employed sophisticated sampling methods to maximize analytic power for comparisons of Latino ethnicity subpopulations; its survey methods were adapted to facilitate comparisons with the Panel Study of Income Dynamics (PSID).
We propose to leverage the unique combination of comprehensive and detailed economic measures with rich information on households’ current and past circumstances to study wealth disparities by race, ethnicity, and socioeconomic status in Chicago. An important focus will be to identify barriers to wealth accumulation among people of color, recognizing that economic circumstances and barriers to advancement vary greatly within groups of people of color, for example, by whether their families arrived in this country recently. We will study potential drivers of wealth disparities using the rich information on family income and demographics, immigration history, health, transfers, incarceration history, childhood circumstances, etc. We will connect and solicit input from the CCT and their community members to ensure nuanced interpretation of our findings. Feedback on interim results will help guide subsequent analyses. The insights will be informative for other large urban areas.