Asset Poverty Risk and the Race Divide Over the Period 1984 to 2004

Thomas Hirschl, Cornell University
Ashon Bradford, Cornell University

This study analyzes the trend in asset poverty, defined as the amount of resources needed to sustain a family for several months. Assets constitute a private safety net, and can obviate the need for a social safety net. Racial differences in asset poverty risk, or the likelihood of experiencing asset poverty, model the relationship between race and class. Using the Panel Study of Income Dynamics, two approaches are deployed to analyze race specific trends in asset poverty risk: 1) a cohort model, and 2) an age model, including a multivariate analysis of the transition to asset poverty. The results suggest that the point-in-time risk of asset poverty tends to recede with aging among whites and blacks in the context of high cumulative risk. The results are discussed in terms of lack of political opposition to the withering social safety net.