Hostname: page-component-cd9895bd7-gxg78 Total loading time: 0 Render date: 2024-12-26T04:04:07.033Z Has data issue: false hasContentIssue false
  • English
  • Français

WEALTH IN THE EXTENDED FAMILY

An American Dilemma

Published online by Cambridge University Press:  22 December 2010

Ngina S. Chiteji
Ngina S. Chiteji*
Affiliation:
Department of Economics, Skidmore College
*
Ngina S. Chiteji, Department of Economics, Skidmore College, 815 N. Broadway, Saratoga Springs, NY 12866. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper argues that researchers may be misgauging family resources by focusing narrowly on the nuclear family when measuring these resources. While social scientists have long been interested in the ways that families' material resources affect their ability to provide for their offspring, the traditional measures of family resources have emphasized parents' income and parents' wealth, although the interest in the latter is relatively new (Conley 2009 [1999]; Haveman et al., 2001; Oliver and Shapiro, 2006 [1995]). This paper attempts to shift the focus to the extended family, and it uses data from the Panel Study of Income Dynamics (PSID) and the Child Development Supplement (CDS) to paint a portrait of the volume of wealth that is available in the grandparent generation of a child's family tree. After theorizing about the potential ways that grandparent wealth can affect children's life chances, the research shows that there are substantial differences in extended-family wealth by race. The Black/White wealth ratio is on the order of 0.11 in the grandparent generation at the median, which indicates that the typical Black child has grandparents with only about eleven cents of wealth for every dollar that the grandparents of the typical White child possess. Some implications of this wealth gap for children and society are discussed.

Keywords

Racial Wealth InequalityChildrenThe Black FamilySocial Stratification
Type
State of the Art
Information
Du Bois Review: Social Science Research on Race , Volume 7 , Issue 2 , Fall 2010 , pp. 357 - 379
Copyright
Copyright © W.E.B. Du Bois Institute for African and African American Research 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Arrondel, Luc, Masson, Andre, and Pestieau, Pierre (1997). Bequest and Inheritance: Empirical Issues and France-U.S. Comparison. In Errygers, Guido and Vandevelde, Toon (Eds.), Is Inheritance Legitimate? Ethical and Economic Aspects of Wealth Transfers, pp. 89–125. New York: Springer.CrossRefGoogle Scholar
Bachman, Heather and Chase-Landsdale, Lindsay (2005). Custodial Grandmothers' Physical, Mental and Economic Well-being. Family Relations, 54(4): 475–487.CrossRefGoogle Scholar
Becker, Gary (1991). A Treatise on the Family, 2ed.Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Bengtson, Vern (2001). Beyond the Nuclear Family: The Increasing Importance of Multigenerational Bonds. Journal of Marriage and the Family, 63(1): 1–16.CrossRefGoogle Scholar
Black, Sandra and Sufi, Amir (2002). Who Goes to College? Differential Enrollment by Race and Family Background. NBER Working Paper No. 7249.CrossRefGoogle Scholar
Blau, David (1999). The Effect of Income on Child Development. Review of Economics and Statistics, 81(2): 261–276.CrossRefGoogle Scholar
Blinder, Alan (1988). Comments on Chapters 1 and 2. In Kessler, Denis and Masson, Andre (Eds.), Modeling the Accumulation and Distribution of Wealth, pp. 68–76. Oxford, United Kingdom: Clarendon Press.Google Scholar
Caner, Asena and Wolff, Edward (2004). Asset Poverty in the United States. Review of Income and Wealth, 50(4): 493–518.CrossRefGoogle Scholar
Chiteji, Ngina and Hamilton, Darrick (2005). Family matters: Kin networks and asset accumulation. In Sherraden, Michael (Ed.), Inclusion in the American Dream: Assets, Poverty and Public Policy, pp. 87–111. New York: Oxford University Press.CrossRefGoogle Scholar
Conley, Dalton (2009 [1999]). Being Black, Living in the Red: Race, Wealth and Social Policy in America. Berkeley, CA: University of California Press.CrossRefGoogle Scholar
Dahl, Gordon and Lochner, Lance (2005). The Impact of Family Income on Child Achievement. NBER Working Paper No. 11279.CrossRefGoogle Scholar
Danziger, Sheldon and Rouse, Cecilia (2007). The Price of Independence: The Economics of Early Adulthood. New York: Russell Sage Foundation.Google Scholar
Davis-Kean, Pamela (2005). The Influence of Parent Education and Family Income on Child Achievement: The Indirect Role of Parental Expectations and the Home Environment. Journal of Family Psychology, 19(2): 294–304.CrossRefGoogle ScholarPubMed
Duncan, Greg and Brooks-Gunn, Jeannie (1997). Consequences of Growing up Poor. New York: Russell Sage Foundation.Google Scholar
Friedman, Milton and Friedman, Rose (1979). Free to Choose. New York: Hartcourt Brace Jovanovich, Inc.Google Scholar
Fussell, Elizabeth and Furstenberg, Frank (2005). The Transition to Adulthood During the Twentieth Century. In Settersten, Richard, Furstenberg, Frank, and Rumbaut, Ruben (Eds.), On the Frontier of Adulthood: Theory, Research and Public Policy, pp. 29–75. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
Gale, William and Potter, Samara (2003). The Impact of Gifts and Bequests on Aggregate Saving and Capital Accumulation. In Munnell, Alicia and Sunden, Annika (Eds.), Death and Dollars: The Role of Gifts and Bequests in America, pp. 319–344. Washington, DC: Brookings Institution Press.Google Scholar
Gauthier, Anne (2002). The Role of Grandparents. Current Sociology, 50(2): 295–307.CrossRefGoogle Scholar
Gittleman, Maury and Wolff, Edward (2004). Racial Differences in Patterns of Wealth Accumulation. Journal of Human Resources, 39(1): 193–227.CrossRefGoogle Scholar
Greene, William (1997). Econometric Analysis, 3rd edition. Upper Saddle River, NJ: Prentice-Hall.Google Scholar
Haveman, Robert, Sandefur, Gary, Wolfe, Barbara, and Voyer, Andrea (2001). Inequality of Family and Community Characteristics in Relation to Children's Attainments. Paper prepared for the University of Wisconsin Russell Sage Working Group on Inequality, December 11, 2001.Google Scholar
Haveman, Robert and Wolff, Edward (2004). The Concept and Measurement of Asset Poverty. Journal of Economic Inequality, 2(2): 145–169.CrossRefGoogle Scholar
Haveman, Robert and Wolff, Edward (2005). Who are the Asset Poor? Levels, Trends, and Composition, 1983–1998. In Sherraden, Michael (Ed.), Inclusion in the American Dream: Assets, Poverty, and Public Policy, pp. 61–86. New York: Oxford University Press.CrossRefGoogle Scholar
Heflin, Colleen and Pattillo, Mary (2006). Poverty in the Family: Race, Siblings and Socioeconomic Heterogeneity. Social Science Research, 35(4): 804–822.CrossRefGoogle Scholar
Heflin, Colleen and Pattillo-McCoy, Mary (2002). Kin Effects on Black-White Account and Home Ownership. Sociological Inquiry, 72(2): 220–239.CrossRefGoogle Scholar
Hofferth, Sandra (1984). Kin Networks, Race, and Family Structure. Journal of Marriage and the Family, 46: 791–806.CrossRefGoogle Scholar
Hurst, Erik, Luoh, Ming Ching, and Stafford, Frank (1998). The Wealth Dynamics of American Families, 1984 to 1994. Brookings Papers on Economic Activity, 1: 267–337.CrossRefGoogle Scholar
Johnson, Heather (2006). The American Dream and the Power of Wealth: Choosing Schools and Inheriting Inequality in the Land of Opportunity. New York: Routledge.Google Scholar
Keister, Lisa (2000). Wealth in America: Trends in Wealth Inequality. New York: Cambridge University Press.CrossRefGoogle Scholar
Kotlikoff, Laurence and Summers, Lawrence (1981). The Role of Intergenerational Transfers in Aggregate Capital Accumulation. Journal of Political Economy, 89(4): 706–32.CrossRefGoogle Scholar
Kotlikoff, Laurence and Summers, Lawrence (1988). The Contribution of Intergenerational Transfers to Total Wealth: A Reply. In Kessler, Denis and Masson, Andre (Eds.), Modeling the Accumulation and the Distribution of Wealth, pp. 53–67. Oxford, United Kingdom: Clarendon Press.Google Scholar
Leigh, Wilhelmina (2006). Wealth Measurement: Issues for People of Color in the United States. In Nembhard, Jessica Gordon and Chiteji, Ngina (Eds.), Wealth Accumulation and Communities of Color, pp. 23–66. Ann Arbor, MI: University of Michigan Press.Google Scholar
Magnuson, Katherine (2007). Maternal Education and Children's Academic Achievement during Middle Childhood. Developmental Psychology, 43(6): 1497–1512.CrossRefGoogle ScholarPubMed
Mayer, Susan (1997). What Money Can't Buy: Family Income and Children's Life Chances. Cambridge, MA: Harvard University Press.Google Scholar
Menchik, Paul and Jianakoplos, Nancy (1997). Black-White Wealth Inequality: Is Inheritance the Reason? Economic Inquiry, 35(2): 428–442.CrossRefGoogle Scholar
Modigliani, Franco (1988). Measuring the Contribution of Intergenerational Transfers to Total Wealth: Conceptual Issues and Empirical Findings. In Kessler, Denis and Masson, Andre (Eds.), Modeling the Accumulation and the Distribution of Wealth, pp. 21–52. Oxford, United Kingdom: Clarendon Press.Google Scholar
Mutchler, Jan and Baker, Lindsay (2004). A Demographic Examination of Grandparent Caregivers in the Census 2000 Supplementary Survey. Population Research and Policy Review, 23(4): 359–377.CrossRefGoogle Scholar
Oliver, Melvin and Shapiro, Thomas (2006 [1995]). Black Wealth/White Wealth: A New Perspective on Racial Inequality. Tenth anniversary edition.New York: Routledge Press.Google Scholar
Orr, Amy (2003). Black-White Differences in Achievement: The Importance of Wealth. Sociology of Education, 76(4): 281–304.CrossRefGoogle Scholar
Parker, Faith, Boak, Alison, Griffin, Kenneth, Ripple, Carol, and Peay, Lenore (1999). Parent-Child Relationship, Home Learning Environment and School Readiness. School Psychology Review, 28(3): 413–425.CrossRefGoogle Scholar
Raley, R. Kelly (1995). Black-White Differences in Kin Contact and Exchange among Never Married Adults. Journal of Family Issues, 16(1): 77–103.CrossRefGoogle Scholar
Schoeni, Robert (1992). Essays on Private Interhousehold Transfers and the Family. PhD Dissertation, Department of Economics, University of Michigan.Google Scholar
Schoeni, Robert and Ross, Karen (2005). Material Assistance from Families During the Transition to Adulthood. In Settersten, Richard, Furstenberg, Frank, and Rumbaut, Ruben (Eds.), On the Frontier of Adulthood: Theory, Research and Public Policy, pp. 396–416. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
Scholz, John Karl and Levine, Kara (2004). U.S. Black-White Inequality. In Neckerman, Kathryn (Ed.), Social Inequality, pp. 895–929. New York: Russell Sage Foundation.Google Scholar
Shanahan, Michael, Porfeli, Erik, Mortimer, Jeylan, and Erickson, Lance (2005). Subjective Age Identity and the Transition to Adulthood: When do Adolescents Become Adults? In Settersten, Richard, Furstenberg, Frank, and Rumbaut, Ruben (Eds.), On the Frontier of Adulthood: Theory, Research and Public Policy, pp. 225–255. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
Shapiro, Thomas (2004). The Hidden Cost of Being African American: How Wealth Perpetuates Inequality. New York: Oxford University Press.Google Scholar
Silverstein, Merril and Long, Jeffrey (1998). Trajectories of Grandparents' Perceived Solidarity with Adult Children. Journal of Marriage and the Family, 60(4): 912–923.CrossRefGoogle Scholar
Solon, Gary (1992). Intergenerational Income Mobility in the United States. American Economic Review, 82(3): 393–408.Google Scholar
Stack, Carol (1974). All Our Kin: Strategies for Survival in a Black Community. New York: Harper and Row.Google Scholar
Swift, Adam (2005). Justice, Luck and the Family: The Intergenerational Transmission of Economic Advantage from a Normative Perspective. In Bowles, Samuel, Gintis, Herbert & Groves, Melissa (Eds.), Unequal Chances: Family Background and Economic Success, pp. 256–276. New York: Russell Sage Foundation.Google Scholar
Taylor, Robert J., Chatters, Linda M., and Mays, Vicki M. (1988). Parents, Children, Siblings, In-laws and Non-kin as Sources of Emergency Assistance to Black Americans. Family Relations, 37(3): 298–304.CrossRefGoogle Scholar
Venti, Steven and Wise, David (2001). Aging and Housing Equity. NBER Working Paper Series, No. 8608.Google Scholar
Warren, John and Hauser, Robert (1997). Social Stratification Across Three Generations: New Evidence from the Wisconsin Longitudinal Study. American Sociological Review, 62(4): 561–572.CrossRefGoogle Scholar
Wilhelm, Mark (2001). The Role of Intergenerational Transfers in Spreading Asset Ownership. In Shapiro, Thomas and Wolff, Edward (Eds.), Assets for the Poor, pp. 132–161. New York: Russell Sage Foundation.Google Scholar
Wolff, Edward (1996). Top Heavy: A Study of Increasing Inequality of Wealth in America. New York: Free Press.Google Scholar
Wolff, Edward (1998). Recent Trends in the Size Distribution of Wealth. Journal of Economic Perspectives, 12(3): 131–150.CrossRefGoogle Scholar
Wolff, Edward (2001). Recent Trends in Wealth Ownership, from 1983 to 1988. In Shapiro, Thomas and Wolff, Edward (Eds.), Assets for the Poor, pp. 34–73. New York: Russell Sage Foundation.Google Scholar