Stanford University Study Finds Large Racial Gap in 401(k) Assets

moneybagThe wealth gap has a significant impact on Blacks being able to afford the costs of higher education. A new study by researchers at Stanford University shows that the racial wealth gap will probably be with us for some time to come.

The authors found that African Americans are less likely than their White peers to have significant assets in 401(k) retirement accounts. And even more striking is the fact that for Blacks and Whites who have equal access to the same 401(k) opportunities, Black are less likely to participate and Blacks, on average, contribute a lower percentage of their income than Whites to their savings plans. The study also found that Black participants in 401(k)s are more likely to choose less risky investment options and therefore tend to have lower rates of returns than Whites. Finally, Blacks are more likely than Whites to borrow from their savings plans, which has a further negative impact on their wealth accumulation.

The study, “Racial Disparities in Savings Behavior for a Continuously Employed Cohort,” has been published by the National Bureau of Economic Research. It may be downloaded by clicking here.

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2 COMMENTS

  1. Here we go again, another Historically White College and University (HWCU) called Stanford University conducting flawed research in an effort to make it appears as if the White community has more “significant assets” than the Black community. If this flawed was being intellectually honest, it would have included the amount of “significant assets” the Asian (e.g., Chinese, Japanese, and Korean) have compared to the White community. For example Stanford University, I would suggest you conduct a study of the SES for the Asian community in the San Francisco and San Jose (Silicon Valley) compared to the White community similarly.

    More important, this study should have minimally included that due to American corporate greed along with outsourcing or offshoring, it has resulted in millions of domestic jobs being loss that many provided 401K savings plans. Unfortunately Stanford University, you’re so fixated of using the Black community in a negative lens in order to make it contextually appears as if you’re “on top”. However, the reality is the exact opposite because you’re not intellectually equipped to have an exhaustive dialogue about your own narrowly tailored White patriarchal lens and how it impedes true scholarship. In fairness to you Stanford University, one can very easily make similar claims about the majority of HWCUs in the United States for that matter.

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