Racial/Ethnic Inequality in Wealth during Young Adulthood and Midlife: A Social-psychological Perspective of the Middle Class

Our knowledge remains limited about why there are large racial/ethnic differences in wealth among the middle class in the United States. Owning a home and having positive net worth (i.e., more assets than debts) are important aspirations for the middle class because they signify wealth. This study uses a social-psychological perspective and data from the National Longitudinal Survey of Youth to explore whether the effects of psychological dispositions on these indicators of wealth differ for Blacks, Hispanics, and Whites. Results reveal that having a stronger sense of personal control over life and higher self-esteem significantly increase the odds of achieving positive net worth and homeownership, independent of demographics, educational attainment, current employment, income, and the socioeconomic status of the family of origin. Moreover, interaction effects indicate that the influence of internal locus of control on wealth is stronger for Whites than Blacks. Overall, this study’s findings suggest that the journey between social origins and destinations does not simply need socioeconomic resources, but also psychological resources that come from within the self-concept of the individual. The public policy and mental health implications for the Black middle class are discussed.