Simulating How Large Policy Proposals Affect the Black-White Wealth Gap

The wealth gap between African-American and White households has persisted for decades, prompting policymakers and experts to suggest several large-scale interventions. We evaluate the possible impact of five such proposals on the Black-White wealth gap. These interventions include debt-free college, baby bonds, civil rights enforcement in housing markets, credit market regulations enforcement, and a national retirement savings plan. Using simulations anchored in data and the existing literature, we conclude that baby bonds would have the single largest effect. But a large wealth gap would remain, even if all five proposals were promptly enacted. Only targeted cash or liquid asset transfers to African-Americans can overcome the persistent wealth difference with White households.