Pandemic Mortality Differentials And The Racial And Ethnic Wealth Gap

Death rates among black Americans are much higher than among white Americans. Factors related to structural racism contribute to these outcomes, including disparities in access and quality of health care, poverty, education, neighborhood, and lifestyle. While the racial mortality gap has narrowed over time, the gap has widened significantly during the COVID-19 pandemic.

Accounting for racial and ethnic differences in mortality, differences in Social Security wealth and defined benefit pension savings is key. Welfare values ​​reflect the inflow of benefits that a person can expect over their lifetime, minus the benefits of each future year of life that the person achieves up to that age. Differences in insurance status and income history also contribute to differences in pension wealth.

In Mortality Inequality, the Race, and Ethnic Retirement Gap and The Great Pandemic (NBER Working Paper 31200), researcher Edward Wolff estimates average pension and welfare levels by race and ethnicity over the past two decades and their impact on all-cause mortality . Retirement wealth is an epidemic.

The authors use data from the Survey of Consumer Finances to estimate what benefits and retirement benefits families can expect after retirement. The calculation of the retirement savings takes into account mortality rates based on race, ethnicity and gender.

Between 2006 and 2019, the difference in life expectancy between blacks and whites narrowed but remains significant. White men were expected to live 6.2 years longer than black men in 2006 and 4.8 years longer in 2019; The difference between women was 4.2 years in 2006 and 3.1 years in 2019. On the other hand, Hispanics are living longer than whites, and the gap is widening. For men it was 1.8 years in 2006 and 2.7 years in 2019, for women it was 2.3 years in 2006 and 3.1 years in 2019.

The COVID-19 pandemic has had a significant impact on life expectancy, particularly among racial and ethnic minorities. The difference in life expectancy between blacks and whites widened from 4.8 years to 7 years for men and from 3.1 years to 4.7 years for women. The mortality advantage for Hispanics over whites decreases in males from 2.7 years for Hispanics to 0.2 years for whites and from 3.1 years to 1.2 years for females. These life expectancy estimates for the period represent life expectancy in 2020 if deaths were observed in all age groups.

In 1989, the median wealth of black households was 44% of the median wealth of non-Hispanic white households. By 2019, that rate had risen to 60%, narrowing the racial mortality gap. Implementing the 2020 mortality rate would bring it down to 56% and wipe out a quarter of the gains made over the past three decades.

For Hispanics, the average Social Security rate in 2019 was 76% of the level for non-Hispanic whites, suggesting that lower enrollment and earnings rates among Hispanics offset their mortality advantage. Applying the 2020 death rate, this drops to 69%, which is higher than the black and white rate.

After accounting for defined benefit and defined benefit plan assets, the black-to-white ratio decreased about 10 percentage points from 1989 to 2019, and then decreased another 1.4 points when applying the 2020 mortality rate. Hispanics' share of retirement wealth is included in the 2020 mortality rate, with whites down 0.8 points. Changes in pension wealth due to the pandemic are smaller than changes in Social Security wealth because most pension wealth comes from defined benefit plans whose value is not dependent on death.

The authors conclude that "the racial and ethnic divide in societal wealth has narrowed over the years, but remains quite wide in 2019." The rise in deaths linked to the epidemic has widened the gap, though further research is needed to determine the long-term impact of the epidemic on mortality and pension wealth.

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The research presented in this article was conducted under US Social Security Administration (SSA) grant RDR18000003 and funded by the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the authors and do not necessarily reflect the views or policies of SSA, any federal agency, or NBER. Neither the United States Government, any agency thereof, nor their employees makes any warranties, express or implied, as to the accuracy, completeness, or usefulness of the contents of this report, and assumes no legal liability. Any reference herein to a specific commercial product, process, or service by brand, trademark, manufacturer, or otherwise does not imply endorsement, recommendation, or approval by the United States government. This project was supported by the Agency for Healthcare Research and Quality grant number T32HS026128. The content is the sole responsibility of the authors and does not necessarily reflect the official views of the Agency for Medical Research and Quality. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

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