The wealth gap between U.S. Latinos and white Americans can vary greatly depending on which state they live in, according to new research.
The big picture: Researchers have long known that immigration status, educational attainment and country of origin affect Latino’s financial net worth. But this new analysis adds a layer to a nuanced topic — and can help policymakers better address economic disparities.
Details: The study by Brookings Metro and the Latino Policy Forum, reported this week, examined Latinos’ wealth, financial assets and debt in six key states — California, Florida, Illinois, New York, North Carolina and Texas — finding that Latinos have wildly different financial experiences based in part on geography.
- Researchers analyzed data on Latinos’ home and car equity, rates of retirement savings accounts, and other metrics.
- White people in Illinois on average have nearly twice as much wealth as Latinos in the state, according to the report. In California, the gap is nine-fold.
- Latinos in Illinois had the highest rates of bank assets, retirement accounts and home and car equity.
- New York Latinos had the lowest — only 29% had retirement savings accounts and just 21% had equity in their home.
What they’re saying: State policies and funding — especially for education — are key to understanding the regional differences, Sylvia Puente, president and CEO of the Latino Policy Forum, said during an online event to discuss the report.
- “When we look at the foundation for asset building, it is people’s human capital and their ability to have an education,” Puente said.
- “While certainly entrepreneurship is a path to wealth building, we know that in people’s lifetimes, those with a college degree are gonna earn substantially more than those that don’t.”
Zoom in: Policy makers at all levels of government should examine the programs or initiatives that have helped increase Latino wealth, the study’s authors write.
- They should also consider, among other things, requiring banks to offer low- or no-cost accounts; increasing public subsidies for higher education; creating Baby Bonds, publicly funded investment accounts that start at birth and can be accessed after the child turns 18; and improving access to affordable child care.
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