A new study from the Federal Reserve Bank of St. Louis shows that as most people assume, education is a key both to mobility and to the accumulation of wealth. But another important factor is economic decision-making. And when it comes to financial prudence, whites and Asian-Americans appear to be doing a lot better than Hispanics and African-Americans.
Consider some numbers. From 1989 to 2013, the median wealth of white families stayed essentially constant, rising (in inflation-adjusted dollars) from $130,102 to $134,008. For Hispanic families, in contrast, the value grew significantly, but from a low starting point: $9,229 to $13,900. For African-American families, the story is similar: The median rose from $7,736 to $11,184.
The biggest advance by far was made by Asian-American families, who experienced an increase from $64,165 to $94,440 (including a significant spike since 2010). For most of the past two decades, their median income has been higher than that of whites, and if current trends continue, their median wealth will soon be higher, too.
What accounts for this? Since 1989, Asian-Americans have enjoyed an explosive growth in educational attainment. In 2013, 65 percent of Asian-Americans ages 35 to 39 had a four-year college degree — compared with 42 percent for whites, 26 percent for African-Americans and 16 percent for Hispanics. Over time, these differences are bound to produce increases in both income and wealth.