Equitable Wealth Building, For a Healthy Future

Sicong “Summer” Sun (University of Kansas)

Doesn’t wealth buy health?

For people of color, it’s not that simple.

As both affluent and less privileged individuals are aware, socioeconomic status is a powerful predictor of one’s health. ⁱ Wealth has a significant impact on various aspects of health, including health behaviors, access to healthcare, morbidity, and mortality. The significant wealth-health linkage underscores the urgency of closing wealth divides if we are to shrink health disparities. However, while data affirm that socioeconomic status—including wealth, specifically—influences a variety of health outcomes, ⁱⁱ it’s increasingly clear that, for people of color, there’s more to the story. ⁱⁱⁱ

What We Examined

The studies described here used data from the National Longitudinal Survey of Youth to examine the relationship between wealth and health (broadly defined to include adolescents’ and young adults’ behavioral problems, mental health, and self-rated health status). The data source and sample ^iv make particularly valuable contributions to our understanding of the wealth-health relationship because: (1) wealth is the most stable, intergenerational measure of socioeconomic status, capturing how assets can be leveraged over time to secure better access to resources and then, greater health, ^v (2) Young adulthood is a key period for health outcomes and wealth accumulation, with gaps in both areas compounding; (3) health is today recognized as multifaceted, requiring assessment from many angles. Taken together, these investigations highlight the far-reaching consequences of wealth inequities and the imperative of equitable wealth-building. They also provide a valuable glimpse into the future, facilitating transformative interventions to address both health and wealth by putting race at the center to improve the well-being of all. ^vi

Realizing wealth’s promise of better health requires not only more wealth than most Black communities currently have; it also requires more for people of color to see the health returns catalyzed earlier in other groups’ ascent to greater wealth—and health.

What We Found

It takes more wealth to protect Black health

This research affirmed that, overall, having high wealth secures better health. Respondents in the highest net worth quartile had more than two times higher odds of reporting “good” to “excellent” health. ^vii However, further examination reveals important differences by race. For non-Hispanic white and Hispanic young adults, wealth has an incremental, consistent effect on self-rated health. However, Black Americans only see this health ‘dividend’ at the highest quartile, which is roughly the second quartile among the white sample. ^viii This is because Black Americans have very little wealth to begin with due to the systemic exclusion of wealth-building opportunities. ^iv That means that realizing wealth’s promise of better health requires not only more wealth than most Black communities currently have; it also requires more for people of color to see the health returns catalyzed earlier in other groups’ ascent to greater wealth—and health.

Children of color are less protected by their parents’ wealth

Considering ‘health’ to include not only physical well-being but also mental health and behavioral outcomes reveals similar inequities. ^x Wealth significantly reduces the odds of child behavior problems—including anxiety/depression and antisocial behavior—for non-Hispanic white children, thus protecting them from the negative academic and financial outcomes of problem behavior. However, for Black children, wealth is far less protective. Only wealth in the highest quartile protects Black children against antisocial behavior, and only Black children in the highest and second-highest quartiles have less risk of anxiety/depression. Parental wealth has no significant effects on the behavior of Hispanic youth. ^xi

Diminishing returns, but equalizing wealth can equalize health outcomes

Crucially, after controlling for wealth differences, racial/ethnic differences in young adults’ self-rated health were no longer statistically significant. Also fading in significance were income, parental education, and insurance status. ^xii However, as illustrated below, findings reveal that people of color—especially Black young adults—receive diminishing health returns from wealth. ^xiii Considering other health and wealth indicators reveals similar patterns. For example, while financial assets were positively associated with mental health, these associations were significantly weaker for non-Hispanic Black respondents. ^xiv This potential for socially marginalized groups to gain significantly less health return from socioeconomic status ^xv reflects entrenched disadvantages and systemic barriers. This underscores the challenges of reducing health and wealth disparities in an unjust society.

Not all assets are created equal

Importantly, not only were the health benefits of accumulating financial assets weaker for Black young adults, but they also experience more health harms from borrowing unsecured debts (e.g., student loans). Unsecured debt was protective of health only for non-Hispanic white young adults, with adverse health consequences for people of color, especially Black young adults.^xvi This aligns with other research that has found diminishing health returns from socioeconomic resources for marginalized communities^xvii and greater risks of negative health outcomes from borrowing debt.^xviii

What It Means For Practice & Policy

While wealth should be considered a protective force in prevention and a crucial social determinant, these findings make clear: structural racism remains a key factor influencing health, including by shrinking the returns people can realize from the amount of wealth they manage to accumulate.

• Given that the racial wealth gap is a critical driver of racial health inequities, financial capability and asset building policies and programs should be considered explicitly health interventions, catalyzing better health outcomes across the lifespan.^xix Race must be at the forefront of these policy discussions.
• Policy should provide safe, accessible, wealth-building financial services ^xx and prioritize cultivation of financial capability, rather than solely rely on individual knowledge and behavior to secure financial products (aka ‘pull up by your own bootstraps’) to achieve better health.
• Because Black Americans appear to need higher levels of wealth to see a health return, interventions should be both inclusive—to actively include people who were not positioned to participate in the wealth-building programs and policies others leveraged for their financial and overall well-being—and progressive (with greater public investments for those least advantaged), given the asset investment required for people of color to realize health gains from greater wealth.
• While the findings suggest that wealth-building can address children’s behavioral outcomes, here—as in so much of education—improving outcomes will require structural policy change. Universal Child Development Accounts, which provide universal accounts with progressive features to subsidize and incentivize wealth creation in disadvantaged families, equip all families with assets to improve outcomes across the life span. ^xxi . Such aims are outlined in policy proposals like “Baby Bonds”. This research adds to these policy conversations by underscoring that progressive and inclusive asset-building is not only a financial intervention, but also an essential investment in individual and population health. ^xxii
• Given the size of current and expected future wealth gaps and the corrosive effects of unsecured debt for young adults of color, debt relief may promote mental well-being among young adults.

References

i. Phelan, J. C., Link, B. G., & Tehranifar, P. (2010). Social Conditions as Fundamental Causes of Health Inequalities: Theory, Evidence, and Policy Implications. Journal of Health and Social Behavior, 51(S), 28–40. doi: 10.1177/0022146510383498.

ii. Pollack, C. E., Chideya, S., Cubbin, C., Williams, B., Dekker, M., & Braveman, P. (2007). Should health studies measure wealth? A systematic review. American Journal of Preventative Medicine, 33(3), 250–264. doi: 10.1016/j.amepre.2007.04.033.

iii. Adler, N. E., & Stewart, J. (2010). Health disparities across the lifespan: Meaning, methods, and mechanisms. Annals of the New York Academy of Sciences, 1186(1), 5–23. doi: 10.1111/j.1749-6632.2009.05337.x; Colen, C. G., Krueger, P. M., & Boettner, B. L. (2018). Do rising tides lift all boats? Racial disparities in health across the lifecourse among middle-class African-Americans and Whites. SSM -Population Health, 6, 125–135. doi: 10.1016/j.ssmph.2018.07.004.

iv. Sun, S., Lee, H., & Hudson, D. L. (2022). Racial/ethnic differences in the relationship between wealth and health across young adulthood. SSM - population health, 21, 101313. doi: 10.1016/j.ssmph.2022.101313.

v. Pollack, C. E., Chideya, S., Cubbin, C., Williams, B., Dekker, M., & Braveman, P. (2007). Should health studies measure wealth? A systematic review. American Journal of Preventative Medicine, 33(3), 250–264. doi: 10.1016/j.amepre.2007.04.033.

vi. Hudson, D. L. (2020). Introduction to the special issue on race at the forefront. Journal on Race, Inequality, and Social Mobility in America, 2(1), a1. https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=1008&cont…

vii. Sun, S., Lee, H., & Hudson, D. L. (2022). Racial/ethnic differences in the relationship between wealth and health across young adulthood. SSM - population health, 21, 1 101313. doi: 10.1016/j.ssmph.2022.101313.

viii. Ibid

ix. Pfeffer, F. T., & Killewald, A. (2019). Intergenerational Wealth Mobility and Racial Inequality. Socius, 5. doi: 10.1177/2378023119831799.

x. Sun, S. (2021). Racial/Ethnic Differences in the Relationship Between Wealth and Health. Doctoral Dissertation. St. Louis, MO: George Warren Brown School of Social Work, Washington University.

xi. Sun, S., Chiang, C. J., & Hudson, D. (under review). Racial/Ethnic Differences in the Association Between Parental Wealth and Child Behavioral Problems.

xii. Sun, S., Lee, H., & Hudson, D. L. (2022). Racial/ethnic differences in the relationship between wealth and health across young adulthood. SSM - population health, 21, 101313. doi: 10.1016/j.ssmph.2022.101313.

xiii. Ibid

xiv. Sun, S. (2021).

xv. Assari, S. (2018). Health disparities due to diminished return among Black Americans: Public policy solutions. Social Issues and Policy Review, 12(1), 112–145. doi: 10.1111/sipr.12042.

xvi. Sun, S. (2023). Building Financial Capability and Assets to Reduce Poverty and Health Disparities: Race/Ethnicity Matters. J. Racial and Ethnic Health Disparities. doi: 10.1007/s40615-023-01648-9.

xvii. Boen, C. (2016). The role of socioeconomic factors in Black-White health inequities across the life course: Point-in-time measures, long-term exposures, and differential health returns. Social Science & Medicine, 170, 63–76. doi: 10.1016/j.socscimed.2016.10.008.

xiii. Walsemann, K. M., Ailshire, J. A., & Gee, G. C. (2016). Student loans and racial disparities in self-reported sleep duration: Evidence from a nationally representative sample of US young adults. J Epidemiol Community Health, 70(1), 42–48. doi:10.1136/jech-2015-205583.

xix. Braveman, P., Acker, J., & Arkin, E. (2018). Wealth matters for health equity: Executive summary. Robert Wood Johnson Foundation.

xx. Huang, J., Sherraden, M. S., & Sherraden, M. (2021). Toward finance as a public good. (CSD Working Paper No. 21-03). St. Louis, MO: Washington University, Center for Social Development. doi: 10.7936/p8dd-p256.

xxi. Huang, J., Sherraden, M., Clancy, M. M., Beverly, S. G., Shanks, T. R., & Kim, Y. (2021). Asset building and child development: A Policy model for inclusive child development accounts. RSF: The Russell Sage Foundation Journal of the Social Sciences, 7(3), 176-195.

xxii. Darity, W., & Hamilton, D. (2012). Bold policies for economic justice. The Review of Black Political Economy, 39(1), 79–85. doi:10.1007/s12114-011-9129-8.

Citations

Sun, S. (2023). Equitable Wealth Building, for a Healthy Future. Lawrence, KS: Center for Community Engagement and Collaboration, School of Social Welfare, University of Kansas.