Wealth, Race, and Place: How Neighborhood (Dis)advantage From Emerging to Middle Adulthood Affects Wealth Inequality and the Racial Wealth Gap

Do neighborhood conditions affect wealth accumulation? This study uses the National Longitudinal Survey of Youth 1979 cohort and a counterfactual estimation strategy to analyze the effect of prolonged exposure to neighborhood (dis)advantage from emerging adulthood through middle adulthood. Neighborhoods have sizable, plausibly causal effects on wealth, but these effects vary significantly by race/ethnicity and homeownership. White homeowners receive the largest payoff to reductions in neighborhood disadvantage. Black adults, regardless of homeownership, are doubly disadvantaged in the neighborhood–wealth relationship. They live in more-disadvantaged neighborhoods and receive little return to reductions in neighborhood disadvantage. Findings indicate that disparities in neighborhood (dis)advantage figure prominently in wealth inequality and the racial wealth gap.