Blog Post

The Wealth and Health Gap Between Black and White Americans

Reparation Payments May Narrow Racial Disparities

January 11, 2023

By:

Kaday Kamara, MPH

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On average, White families hold eight times the wealth of Black families. Centuries of structural racism, including slavery, Jim Crow laws, discriminatory housing practices, and social, economic, and political exclusion, all contributed to this wealth inequity. In turn, the difference in economic and social resources has driven inequity in health.

A new JAMA Network Open study led by former Penn Medical Student Kathryn Himmelstein and LDI Senior Fellow Atheendar Venkataramani examines the association between racial disparities in health and wealth, and estimates the impact of reparation payments in closing these gaps.

Himmelstein, Venkataramani, and colleagues analyzed data from 33,000 participants in the Health and Retirement Study (HRS), one of the few datasets that collects information on wealth, or total household assets, and mortality.

Wealth Linked to Life Expectancy

Black participants had a median life expectancy of 77.5 years, 4 years shorter than their White counterparts. Similar disparities were uncovered in terms of wealth and income. Over 20% of Black families belonged to the lowest income decile compared to 6% of White ones. Additionally, the median wealth of Black households was $31,500, compared to $215,785 for White households.

Commenting on the study, Venkataramani said, “Our first main finding is that the entire racial gap in longevity can be fully explained by just one factor, which is wealth.” Health care providers and researchers usually rely on income or level of education to measure economic disadvantage, he noted. But these measures paint an incomplete picture of racial disparities. Wealth must be further researched and accounted for to fully understand inequities in life expectancy.

Reparations Could Close Life Expectancy Gap between Blacks and Whites

Himmelstein, Venkataramani, and colleagues modeled the potential impact of reparations payments on closing the longevity gap. They found that reparations payments of $828,055 per household closed the longevity gap between Black and White individuals by 65.0% to 102.5%. The model shows that reparation payments have the potential to reduce racial disparities in wealth and health, but this research is just a first step. Because reparations policies have not been done, he noted, the provisional findings can only offer “a good first ‘back-of-the-envelope’ calculation – a starting point for a broader research agenda on reparations and health.” How exactly they would affect society as a whole remains unknown.

Attempting to design a reparations policy requires a level of speculative thinking. “We had to make some assumptions about cause and effect between wealth and health, where the reparations are coming from, and the size and type of reparations that are pursued,” Venkataramani acknowledged. Nonetheless, the study’s findings indicate that reparations policies could close racial gaps in lifespan since wealth is clearly an important factor with enormous consequences for health outcomes. As a result, economic policies designed to address racial disparities in wealth should not be isolated from health outcomes. For example, improved population health offers potential rates of return that must be accounted for in payment calculations.

The Potential of Reparations

Reparations payments would transform social and economic opportunities for the Black community in a variety of ways. Reparations payments could improve access to quality housing, health care, food, and more. Increased wealth could support community-level resources, such as small business and public schools, aid Black-serving institutions such as historically Black colleges and universities and safety-net hospitals, and also have potential psychological benefits.

However, reparation payments cannot stand alone. “In my view, a reparations policy in isolation, without other legal and social policies that may address ongoing discrimination, will close wealth and health gaps in the short run, but the gap will open up again in the long run,” says Venkataramani. On their own, reparations would be important and transformative—but paired with further policy, they hold the possibility of restructuring a society where racial disparities in wealth and health are eliminated, and all communities can thrive.

The study, Association Between Racial Wealth Inequities and Racial Disparities in Longevity Among U.S. Adults and Role of Reparations Payments, 1992 to 2018, was published on November 7, 2022, in JAMA Network Open. Authors include Kathryn E.W. Himmelstein, Jourdyn A. Lawrence, Jaquelyn L. Jahn, Joniqua N. Ceasar, Michelle Morse, Mary T. Bassett, Bram P. Wispelwey, William A. Darity Jr, and Atheendar S. Venkataramani.