WI23-09: Racial Wealth Disparities in Older Age and Social Security Program Participation

Using the Health and Retirement Survey (HRS), we document large wealth disparities between older age persons in White households vs. Black households. We find that racial wealth disparities widen with age across the entire wealth distribution. Behind the disparities in wealth levels, we show that wealth accumulation is slower for Black households compared to White households with similar initial wealth. In fact, the racial wealth accumulation gap is larger among wealthier households. We then ask how Social Security program design shapes racial differences in wealth accumulation. We show that the onset of Supplement Security Income (SSI) receipt–a means-tested anti-poverty payment–is associated with a reduction in relative racial wealth disparities. In contrast, results are mixed for Social Security Disability Insurance (SSDI)–a program tied to work history. We conclude by discussing future directions of research for understanding Black/White wealth gaps among older households and the effects of Social Security program design.