State Politics and Racial Inequality in Wealth Accumulation from Recession Recovery to Post-Pandemic Peak

• In Event: Inequality, Poverty, and Mobility Section Roundtables
  In Refereed Roundtable (60 minute): 9. Wealth Inequality

Abstract

How do macro-structural conditions affect racial inequality in wealth accumulation? This paper assesses the impact of one vital macro-structural condition– political party power in US states– and how it shapes the wealth accumulation patterns of white and Black young adult households between 2013 and 2023. Combining data from the Panel Study of Income Dynamics (PSID), and state-level data on housing prices and political legislative control, we use multi-level growth curve models to assess disparities in accumulation among the middle 90% of the wealth distribution. Our preliminary findings suggest significant changes in patterns of wealth accumulation in the post-pandemic period. State political environment becomes an important determinant of wealth accumulation as well as inequality in accumulation as of 2023. Our current estimates suggest that the wealth gap between White and Black families is about $3,000 larger in Republican controlled states in 2023. We make several contributions, including extending power resources theory to wealth inequality and racial inequality, and examining the racial wealth gap between the Great Recession recovery and post-pandemic periods.

Authors

• Elizabeth C. Martin, Syracuse University

• Laura DeMarco, North Carolina State University