Disparities in Minority Retirement Savings Behavior

Survey and Experimental Evidence from A Nationally-Representative Sample of US Households

by Joanne K. Yoong, Angela A. Hung, Silvia Helena Barcellos, Leandro Carvalho, Jack Clift

Download eBook for Free

FormatFile SizeNotes
PDF file 0.5 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

In this paper, we investigate the main barriers to the accumulation of retirement savings faced by minority groups in the United States. We focus in particular on the roles of financial literacy and social networks, in order to develop implications for policies that better address the needs of these populations. We conduct an initial analysis of new data collected in the RAND American Life Panel to document and compare retirement savings of Hispanics, Asians and African Americans to the majority nonwhite Hispanic population, comparing retirement savings and the asset allocation of these groups to estimates that are representative of the population at large as well as across the different minority groups. We also measure and compare systematic differences in planning behavior, risk preferences and financial capability/literacy across these groups. We then analyze to what extent minority status independently predicts retirement savings outcomes relative to socioeconomic determinants of retirement savings such as age, gender, education, and wealth, as well as how these determinants interact with minority status to affect retirement savings. We estimate to what degree differences that attach to minority status can be attributed to differences in these factors, as well as to financial literacy and social/cultural factors such as beliefs about the financial system and expectations about family support.

Research conducted by

The research described in this report was conducted by RAND Education and Labor.

This report is part of the RAND Corporation Working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.