Racial and Ethnic Differences in Pension Wealth

It is well established that Black and Hispanic workers accumulate leszs wealth for retirement than white workers. This study provides evidence on whether racial and ethnic differences in private pension coverage and benefit levels contribute to the wealth differentials. Using data from the Current Population Survey, Survey of Consumer Finances and the Health and Retirement Survey, several consistent findings emerge. First, most of the racial and ethnic differences in pension benefit levels are accounted for by differences in worker charateristics. Second, among workers who are covered by a private pension, racial and ethnic differences in pension asset accumulation are quite small. Finally, exclusion of pension wealth has a small effect on the comparison of average levels of wealth across racial and ethnic groups, but has a substantial effect for comparisons at the bottom of the wealth distribution. Overall, the findings suggest that, holding worker characteristics constant, minority and majority workers accumulate very similar levels of wealth.