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Racial/Ethnic Inequalities in Wealth and Health Trajectories Divergent Pathways: Racial/Ethnic Inequalities in Wealth and Health Trajectories Tyson H. Brown A dissertation submitted to the faculty of the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Sociology. Chapel Hill 2008 Approved by Glen H. Elder, Jr., Ph.D. Barbara Entwisle, Ph.D. Ted Mouw, Ph.D. Peggy Thoits, Ph.D. Peter Uhlenberg, Ph.D. © 2008 Tyson H. Brown ALL RIGHTS RESERVED ii Abstract Tyson H. Brown Divergent Pathways: Racial/Ethnic Inequalities in Wealth and Health Trajectories (Under the direction of Glen H. Elder, Jr., Barbara, Etwisle, Ted Mouw, Peggy Thoits, and Peter Uhlenberg) Extensive empirical evidence documents racial/ethnic disparities in both wealth and health: compared to Whites, Hispanics and Blacks have considerably less wealth and worse health. However, it remains unclear why racial/ethnic inequalities in wealth and health emerge, and whether these inequalities decrease, remain stable, or increase with age. This dissertation aims to fill these gaps in the literature by drawing on life course perspectives and methods to investigate racial/ethnic differences in wealth and health trajectories (i.e., long- term patterns of intra-individual change and stability in wealth and health with age) and how social disadvantage contributes to racial/ethnic wealth and health disparities. The first empirical chapter utilizes panel data from the National Longitudinal Study of Youth (NLSY), a nationally representative survey, and growth curve models to examine racial/ethnic differences in wealth trajectories between ages 21 and 45. Findings reveal that relatively small wealth gaps between Whites, Blacks and Hispanics exist in their early 20s, but these initial inequalities are magnified with age. In the second substantive chapter, data from the Health and Retirement Study (HRS), a nationally representative, longitudinal dataset is used to examine whether racial/ethnic wealth gaps narrow, remain stable, or widen between during the years leading up to retirement (ages 51 and 73). Results show that Whites experience more rapid rates of wealth accumulation than their minority counterparts during middle and later life, resulting in accelerating wealth disparities with age, consistent with a iii process of cumulative disadvantage. At age 73, the average White household has a net worth of approximately $122,000, whereas both Hispanic and Black household have less than $5,000. Substantial racial/ethnic disparities in wealth trajectories persist after controlling for group differences in life course capital suggesting that other factors such as racial/ethnic differences in portfolio composition, financial transfers, and exposure to discrimination may contribute to wealth disparities. The third substantive chapter uses HRS data to examine racial/ethnic differences in health trajectories. Results indicate that there are dramatic racial/ethnic disparities in both the levels and rates of change in health. Overall, findings from this study show that racial/ethnic inequalities result in divergent aging experiences for Black, Hispanic, and White Americans. iv To my grandparents, Rev. Haywood and Mrs. Ruth Lee Brown v Acknowledgements I would like to thank my mentor, Glen H. Elder, Jr., for all of his guidance and support while working on my dissertation and throughout my graduate study at UNC. I am also grateful for valuable comments from Barbara Entwisle, Ted Mouw, Peggy Thoits, Peter Uhlenberg, Daniel Adkins, Matt Loyd, Miles Taylor and Janel Benson. Research support was provided by National Institute on Aging Grant T32AG00155 and the Carolina Population Center at the University of North Carolina at Chapel Hill. vi Table of Contents Chapter 1: Introduction............................................................................................................. 1 References........................................................................................................................... 11 Chapter 2: Racial/Ethnic Inequalities in Wealth Trajectories, Early to Middle Adulthood ... 15 Introduction......................................................................................................................... 15 Background......................................................................................................................... 17 Data and Methods ............................................................................................................... 24 Results................................................................................................................................. 31 Discussion........................................................................................................................... 34 References........................................................................................................................... 48 Chapter 3: Racial/Ethnic Inequalities in Wealth Trajectories from Mid- to Later-Life ......... 56 Introduction......................................................................................................................... 56 Background......................................................................................................................... 57 Data and Methods ............................................................................................................... 64 Results................................................................................................................................. 71 Discussion........................................................................................................................... 74 References........................................................................................................................... 89 Chapter 4: Racial/Ethnic Disparities in Health Trajectories from Mid- to Later-life............. 97 Introduction......................................................................................................................... 97 Background......................................................................................................................... 98 Data and Methods ............................................................................................................. 106 vii Results............................................................................................................................... 111 Discussion......................................................................................................................... 115 References......................................................................................................................... 127 Chapter 5: Conclusion........................................................................................................... 134 References......................................................................................................................... 149 viii List of Tables Table 2.1 Weighted Baseline Descriptive Statistics ............................................................... 41 Table 2.2 Net Worth Trajectories between Ages 21-45, Growth Curve Models ................... 42 Table 2.3 Net Financial Assets Trajectories between Ages 21-45; Growth Curve Models ... 45 Table 3.1 Weighted Descriptive Statistics.............................................................................. 82 Table 3.2 Net Worth Trajectories between Ages 51 and 73; Growth Curve Models............. 83 Table 3.3 Net Financial Asset Trajectories between Ages 51 and 73; Growth Curve Models ................................................................................................................................................. 86 Table 4.1 Weighted Baseline Descriptive Statistics ............................................................. 120 Table 4.2 Chronic Condition Trajectories between Ages 51 and 73; Growth Curve Models ............................................................................................................................................... 121 Table 4.3 Functional Limitation Trajectories; Growth Curve Models ................................. 124 ix List of Figures Figure 2.1 Net Worth Trajectories between Ages 21 and 45 (Model 1)................................. 43 Figure 2.2 Net Worth Trajectories between Ages 21 and 45 (Model 2)................................. 44 Figure 2.3 Net Financial Asset Trajectories between Ages 21 and 45 (Model 1).................. 46 Figure 2.4 Net Financial Asset Trajectories between Ages 21 and 45 (Model 2).................. 47 Figure 3.1 Net Worth Trajectories between Ages 51 and 73 (Model 1)................................. 84 Figure 3.2 Net Worth Trajectories between Ages 51 and 73 (Model 2)................................. 85 Figure 3.3 Net Financial Asset Trajectories between Ages 51 and 73 (Model 1).................. 87 Figure 3.4 Net Financial Asset Trajectories between Ages 51 and 73 (Model 2).................. 88 Figure 4.1 Chronic Condition Trajectories (Model 1).......................................................... 122 Figure 4.2 Chronic Condition Trajectories (Model 2).......................................................... 123 Figure 4.3 Functional Limitation Trajectories between Ages 51 and 73 (Model 1)............. 125 Figure 4.4 Functional Limitation Trajectories between Ages 51 and 73 (Model 2)............. 126 Figure 5.1 Net Worth Trajectory Results from the
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