In a speech to Congress in 1920, U.S. Senator Selden Spencer (R-MO) lauded the amount of wealth accumulated by Black Americans since the Civil War, stating that it “surpassed any progress under any like circumstances in the history of the world.” One hundred years after this sanguine assessment, however, the racial wealth gap remains the largest of the economic gaps between Black and white Americans. In 2019, Black Americans held just 17 cents on average for every white dollar of wealth. By comparison, the income gap is 50 cents to the dollar. What’s more, the racial wealth gap has shown remarkable stability over the last several decades, with little indication of further convergence. Although there is a large literature on the contemporary racial wealth gap, much less is known about the evolution of the wealth gap over the full post-Emancipation period.
To address this lack of information, we introduce the first continuous time series of white-to-Black per capita wealth ratios in the U.S. over the past 160 years. Our large-scale data collection and harmonization effort fills in about 100 years of missing data on the national racial wealth gap, from the 1880s to the 1980s, when most modern wealth surveys with information on race begin. We do this by digitizing 50 years of data on Black wealth, from the 1860s to the 1910s, from southern state tax reports and combining this with information from the complete-count digitized censuses of 1860 and 1870. We extend this time series through the mid-20th century using historical estimates of total Black and national wealth, verified using the census of agriculture and population and household survey data from the 1930s. Finally, we draw on newly compiled data from historical and modern waves of the Survey of Consumer Finances to complete our coverage from 1949 to 2019. Our new series of white-to-Black per capita wealth ratios is now publicly available.
Our data show that the most dramatic episode of racial wealth convergence occurred in the first 50 years after Emancipation. This initially rapid convergence gave way to much slower declines in the wealth gap in the second half of the 20th century. From a starting point of nearly 60 to 1, the white-to-Black per capita wealth ratio fell to 10 to 1 by 1920, and to 7 to 1 by the 1950s. 70 years later the wealth gap remains at a similar magnitude of 6 to 1. We demonstrate that both this “hockey-stick” pattern of convergence and the large enduring gap today can be broadly rationalized by a parsimonious model of wealth accumulation for each racial group, where savings from income and capital gains are the drivers of wealth growth. Even under equal conditions for wealth accumulation after slavery, in other words, identical savings rates and capital gains across the two groups, our convergence model portends a racial wealth gap of 3 to 1 today. The main reason for such a large and lasting gap is the enormous difference in initial wealth between Black and white Americans on the eve of the Civil War.