Study shows link between wealth, health differs across race, ethnicity in young adulthood

LAWRENCE — The link between socioeconomic position and health has long been established. In other words, the wealthier people are, the better health outcomes they have. A new study from the University of Kansas dives deeper, examining the link between wealth and health and if it differs across race/ethnicity during young adulthood. The results show racial disparities in wealth and health and indicate policy-level solutions are needed to improve health outcomes for all.

Sicong “Summer” Sun, assistant professor of social welfare at KU, and co-authors examined wealth data for nearly 9,000 young people and their self-rated health. Findings showed that the more wealth a young person had, the better their health was, for white and Hispanic individuals. But not for Black respondents, for whom the pattern is more nuanced. Individual and parental wealth were only associated with better health for the highest quartile of Black respondents. Parental wealth was not associated with better health in Hispanic individuals.

“I think it is important to study young adulthood to inform timely program and policy interventions to narrow inequitable outcomes in middle age and later life,” Sun said. “A lot of socioeconomic sorting happens in that phase of life, such as college graduation, getting jobs, figuring out health insurance options, getting married, starting families and buying homes. So, I decided to focus on this critical transition period where life paths begin to diverge and examine wealth, health and well-being and how these relationships differ by race/ethnicity.”

Sun and co-authors analyzed data from the National Longitudinal Survey of Youth 1997. The youths in the survey responded to questions at various points in their lives, and the study examined their self-reported net worth and parental net worth as well as their self-rated levels of health. Wealth was calculated as total assets minus total debt, and the same were considered for parental wealth. Sun said they analyzed those factors in addition to income because wealth varies dramatically across different racial/ethnic groups with similar incomes.

The study, co-written with Hedwig Lee of Duke University and Darrell Hudson of Washington University, was published in the journal SSM – Population Health. Based on Sun’s doctoral dissertation, the publication won the 2023 outstanding dissertation award from the Society for Social Work Research.

The study foremost found a significant racial wealth gap. For example, white respondents had 5.8 times the parental wealth of Black respondents and 4.9 times that of Hispanic respondents.

“You can see the wealth inequality beginning right from the start, and it’s largely due to parental wealth differences and cumulative disadvantage across generations,” Sun said. “Such disadvantage is not because of individual behaviors or traits. You can’t just tell people to ‘pull yourself up by your bootstraps.’ Many are starting out life with disadvantages to their socioeconomic conditions, which fundamentally shape their health and well-being through the life course.”

When looking at the entire sample, racial differences in health were attenuated after controlling for wealth — after adding wealth, racial difference in self-rated health was no longer statistically significant. Findings from the entire sample indicated a strong, positive association between wealth and self-rated health. These findings point to the importance of inclusion of wealth indicators in health studies.

The consistent wealth-health relationship is more nuanced from within subgroup analyses results by race/ethnicity. It turns out that significant racial/ethnic difference exist in the wealth-health nexus. At ages 20, 25 and 30, white and Hispanic respondents’ levels of self-rated health were consistently higher among those with higher levels of wealth, but not among Black respondents. For Black Americans, wealth was only predictive of health in the highest wealth quartile.

“This is because Black families have very little wealth to begin with,” Sun said.

For Hispanic populations, only individual wealth, not parental wealth, had an influence on health. The latter finding requires further research to understand exactly why that is the case, Sun said.

But one result is clear: Wealth-building and societal policies have benefited white populations more than others for generations. The authors wrote that the findings show structural level policy is needed to address the wealth gap, which contributes to poorer health outcomes for people of color.

“Wealth-building policies like tax deferrals for retirement savings (such as 401(k)s and Individual Retirement Accounts) and homeownership (such as home-mortgage interest tax deduction) are embedded in the tax code. But 80% of these tax benefits go to the highest 20% of income earners,” Sun said. “That is completely upside down. To change this, we need more inclusive and progressive policies. Structural problems require structural solutions.”

Policies that help establish retirement savings and help people access homeownership are vital, the authors wrote, but policies that help build wealth from birth could help address wealth inequities through the life course. Findings support policy proposals such as universal Child Development Accounts, “baby bonds” and reparations as ways to eliminate racial wealth gap to narrow racial health inequities.

Sun, whose research considers the links among structural racism, wealth, financial capability and health across the lifespan, hopes to build on the study to further examine the links between wealth and health outcomes for more racial/ethnic groups than the three considered in the current study, as well as studying specific types of assets and debts and the links they may have to physical and mental health. The importance of health is larger than just the effects it has on an individual, as health care costs are shared across society and health influences all aspects of life.

“Health is not created in health clinics. There are wider systems that shape the conditions in which we are born, live, work, age and play. A lot of times when we think about health, we think about diagnosis, medications and health insurance,” Sun said. “In addition, we need to think about contexts and upstream distribution of power, resources and opportunity that affect health and well-being.”

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