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The narrative of this year’s U.S. presidential election made clear that Americans are acutely concerned about the widening income inequality in the United States. The distribution of wealth among American households, however, has been far less studied yet is just as concerning. Whereas income mainly consists of money people earn at work, wealth is defined as the difference between savings—such as bank accounts, retirement accounts, and housing—and debt. Economists have found that wealth is even more unequally distributed than income in the United States.

One particularly understudied aspect of wealth inequality is the distribution of wealth between and among whites and Asian Americans,¹ the fastest growing racial group in the United States. In 2013, the last year for which complete data are available, Asian Americans represented a little more than 5 percent of the nation’s population and have grown faster than any other population group between 2000 and 2013.² Compared with other ethnic groups, Asian Americans tend to have higher incomes than other communities of color.³ These higher incomes among Asian Americans have occasionally led to the popular view of Asian Americans as economically more advantaged than other groups.⁴ This notion, however, ignores the high degree of economic inequality of Asian Americans—inequality that is reflected in the data on wealth. Wealth among Asian Americans is highly concentrated, and many Asian Americans, especially Asian American seniors who need to live off of their savings, live in an economically precarious situation.⁵ Consequently, too many Asian Americans are far away from a secure retirement and ill-prepared to weather an emergency.

This report contributes to the growing number of studies of the economic well-being of Asian Americans, showing that wealth inequality among Asian Americans is far greater than the already high wealth inequality among whites.⁶ Although many Asian Americans have wealth comparable to that of whites, a large share of Asian Americans have little or no wealth. Focusing only on average or median wealth of Asian Americans can thus be misleading because doing so ignores a large share of Asian Americans who continue to struggle economically.

Wealth, after all, is a key indicator of people’s economic security. Wealth or savings allow people to weather unexpected events such as a layoff or illness and plan for the future—for example, sending children to college, starting a business, taking on a new job, and retiring. Put differently, those without wealth or with only little savings are in an economically precarious situation with respect to their future.

If the past few decades are any indication, the economic future remains uncertain and people need more savings. As economic risks such as unemployment, income drops, and unexpected caregiving demands have increased, more short-term savings help people make it through.⁷

People also need to save more to pay for education and retirement. College tuitions have regularly outpaced inflation, driving students deeper into debt absent their own or their families’ savings.⁸ And the costs of retirement keep going up as well. The normal retirement age to receive full Social Security benefits is rising from age 65 to age 67. Defined benefit pensions continue to disappear. Health insurance costs generally outpace incomes, and many people are simply living longer than those in previous generations. People today need to have more savings available to them just to maintain the same standard of living.⁹

Yet many people have only some or even no wealth, while others have amassed substantial amounts. Wealth inequality is typically much larger than income inequality.¹⁰ As a rule, those who struggle economically today also tend to face uncertain futures. Moreover, the gap between those who have a lot of wealth and face a secure future and those who do not keeps growing.¹¹

Increasing wealth inequality, however, is not just about numbers. An unequal wealth distribution means that many people face economic uncertainties on a day-to-day basis because they cannot cover an emergency such as a layoff. It also means that many people cannot, for example, send their kids to the college of their choice, start and grow a business, or move to a new job and/or career.

Differences in wealth are especially stark by race. African Americans and Latinos tend to have a lot less wealth than whites.¹² This wealth gap has persisted as economic mobility and the ability to save has gone down for many people, especially African Americans and Latinos.

Asian Americans, in comparison, are often heralded as the exception.¹³ Their wealth on average and at the median tends to be comparable to that of whites—at least in the years since the Great Recession ended in 2009. This view, though, is somewhat narrow as it overlooks the fact that the economic experience of Asian Americans tends to be more varied than that of whites.¹⁴ For instance, Asian Americans have higher family incomes than is the case for whites—$76,761 compared to $62,950 in 2015—but their poverty rate is also higher, at 11.4 percent compared to 9.1 percent in 2015. Asian Americans are not only the fastest growing racial group in the United States, they are also economically one of the most diverse groups, with a substantial share of Asian Americans struggling day to day.

Considering that this pattern of economic disparity in Asian American communities is not new, it is also no surprise to find substantial wealth inequality among Asian Americans. The data in this report specifically show that:

• Asian American average and median wealth has become comparable to white wealth.
• Asian Americans at the bottom of the income distribution have less wealth than whites at the bottom of the income distribution.
• Wealthy Asian Americans have more wealth than wealthy whites.
• Wealth inequality among Asian Americans is greater than among whites.
• Wealth inequality among Asian Americans has widened over time.
• Asian Americans have fewer retirement benefits than whites.
• Asian Americans have lower homeownership rates than whites.
• Asian Americans owe more debt than whites.

The data on Asian American wealth are a mix of good news and bad news. Asian American wealth has been trending up, catching up to wealth levels for whites on average. But many Asian Americans are left behind with no or very little wealth. Although the data in this report do not allow for a further disaggregation by subpopulations, other data on employment and wages, for instance, suggest that some subpopulations such as Vietnamese-Americans are economically more vulnerable than other groups of Asian Americans.¹⁵ It is thus reasonable to assume that these same subpopulations make up a disproportionate share of Asian Americans with little wealth. Moreover, the gap between wealthy and nonwealthy Asian Americans has widened. Asian Americans also have fewer retirement benefits than whites and are more indebted than whites, creating a potentially precarious situation when stock and housing prices fall. The bottom line is that wealth inequality across American families deserves policy attention. This is especially true for Asian Americans in the bottom half of the income distribution.

Household wealth is the difference between assets that can be turned into income when people need the money and debt that they owe. Wealth is then a safety net for emergencies and a means to pay for big ticket items, such as children’s college education, a down payment for a house, and the start-up costs of a new business; it is also a way to supplement retirement income from Social Security. The gap between those with a lot of wealth and those at the bottom of the income distribution, however, is much larger than comparable income gaps, which have also grown over the past three decades.

To some degree, slow income growth and modest wealth are related. Stagnant income growth for many middle-class families over the past few decades has meant that families have often had to focus on paying rising bills for housing, health care, and education, which has left little room to save.¹⁶ Saving got even more difficult during this time as the labor, stock, and housing markets became more volatile, often decimating people’s savings.¹⁷ Furthermore, employers cut back on retirement benefits for their employees, thus pulling away the extra help that people could have used to save during increasingly insecure times.¹⁸

Not all people are equally affected by these adverse effects. African Americans and Latinos, for instance, tend to be economically more vulnerable than whites.

Asian Americans are often held up as counterexamples of shrinking racial wealth gaps by pointing to their average or median incomes. The use of averages or even medians, though, obscures the fact that the Asian American community is economically very diverse. A large number of Asian Americans indeed fare comparatively well, while a large minority of Asian Americans struggles immensely, often more so than other racial and ethnic minorities.

The summary of existing wealth data shows that at sufficiently high levels of data aggregations, Asian American wealth mirrors that of whites. Average Asian American wealth, for instance, has gradually pulled to par with white wealth in recent years. (see Figure 1) Median Asian American wealth, as summarized in the Appendix, has also become relatively close to median white wealth. (see Appendix for detailed summary tables)

Looking only at average and median wealth for all Asian Americans obscures the fact that wealth is unequally distributed. The bottom one-fifth of households in the Asian American wealth distribution, for instance, had at most $9,319 in 2010–2013. That is, the median Asian American household had more than 14.3 times the wealth of the bottom 20 percent of households. Meanwhile, the top 10 percent of households in the Asian American wealth distribution had more than $1.4 million in 2010–2013. Asian Americans at the 90th percentile—where the top 10 percent of wealthy Asian Americans starts—then had 168.4 times the wealth of the top of the bottom 20 percent—$1,448,118 compared to $9,319—in 2010–2013. (see Table 1)

Wealth inequality among Asian Americans in fact is greater than that among whites. The ratio between median wealth and wealth at the 20th percentile for whites was 12.8—$133,236 compared to $10,468—lower than the comparable ratio of 14.3 for Asian Americans. Moreover, white households at the 90th percentile—the top 10 percent—had 121.3 times the wealth of households at the bottom 20th percentile—$1,260,430 to $10,468 in 2010–2013. This is significantly smaller than the comparable ratio of 168.4 for Asian Americans. (see Table 1) Wealth inequality among Asian Americans was greater in 2010–2013 than among whites because nonwealthy Asian Americans had less wealth than nonwealthy whites and because wealthy Asian Americans had more wealth than wealthy whites.

The lack of wealth among poorer Asian Americans is particularly disconcerting. The median wealth for Asian Americans in the bottom half of the income distribution was $18,270 in 2010–2013. This is much lower than the $42,238 median wealth recorded for whites in the bottom half of the income distribution. (see Table A1 in the Appendix) That is, whites in the bottom half of the income distribution had more than twice the wealth of Asian Americans in the bottom half of the income distribution. 

Asian American wealth inequality has grown over time. Middle-class Asian Americans at the median had 6.6 times the wealth of Asian Americans at the 20th percentile—$97,163 to $8,461—between 1992 and 1998. This ratio increased to 11.8 in 2010–2013. Similarly, Asian American wealth at the 90th percentile was 76.0 times the wealth at the 20th percentile in 1992–1998. This ratio increased to 168.4 in 2010–2013. (see Table 1)

These data signal that wealth has grown faster among wealthy Asian Americans than among middle-class Asian Americans. And middle-class Asian Americans saw faster wealth increases from the early years—1992 to 1998—to the later years—2010 to 2013—than was the case for Asian Americans with little wealth at the 20th percentile of the wealth distribution. Wealth among Asian Americans at the 90th percentile grew by 120.1 percent—it more than doubled—while it grew by 36.4 percent at the median and by only 10.1 percent at the 20th percentile, from the early to the later years. (see Figure 2)

These trends are different from those for whites, largely because wealth at the three percentile levels grew for Asian Americans from 1992–1998 to 2010–2013. White wealth, on the other hand, fell at the 20 percentile, from $15,248 during the early years—1992 to 1998—to $10,468 in the later years—2010 to 2013. (see Table 1) Median white wealth increased by less than 10 percent, and white wealth at the 90th percentile less than doubled during this time period. (see Table 1) That is, wealth inequality among whites increased in large part because wealth declined among less-wealthy whites, although they still had more wealth in 2010–2013 than was the case for less-wealthy Asian Americans.

Asian American wealth looks different from that of whites, when considering its components—assets and debt—individually. The data in particular show some noteworthy differences in the assets between Asian Americans and whites. In 2010–2013, Asian Americans had more assets—$287,306—than whites—$237,401. Yet Asian Americans in the bottom half of the income distribution had much less in assets—$40,503—than whites in the bottom of the income distribution, who owned $91,942 in assets during that time. (see Table 2) That is, assets are more unequally distributed among Asian Americans than among whites.

This greater wealth inequality follows from a more unequal distribution of housing assets—lower homeownership—among Asian Americans than is the case for whites.¹⁹ Houses typically constitute the largest asset for households. The data show that Asian Americans are less likely to be homeowners than whites. Less than three-fifths of Asian Americans—59.6 percent, to be exact—were homeowners in 2010–2013. In comparison, the homeownership rate for whites in the wake of the Great Recession was 73.9 percent. (see Table 2)

Lower rates of homeownership among Asian Americans can have serious implications for people’s economic security. Homeownership can contribute to more stable communities, better educational outcomes, and more civic engagement. These factors together help create more wealth for homeowners, suggesting that lower homeownership rates can result in rising wealth inequality within certain communities.

The homeownership gap between Asian Americans and whites in fact widened a little following the Great Recession. The homeownership rate for Asian Americans dropped by almost 2 percent, from 61.5 percent in 2001–2007 to 59.6 percent in 2010–2013. At the same time, the white homeownership rate only dropped by 1 percent, from 74.9 percent in the 2000s to 73.9 percent in 2010–2013. (see Table 2) The housing crisis associated with the Great Recession apparently hurt Asian Americans more than it did whites.

Behind homeownership, the second-most widely held asset among U.S. households is retirement savings. People can expect to receive retirement income from defined benefit, or DB, pensions, which thus constitute an asset to households. DB pensions typically pay out a monthly income during retirement as long as retirees are alive, rather than giving workers a lump sum when they retire. Additionally, people save for retirement with retirement savings accounts such as 401(k) plans and individual retirement accounts, or IRAs.

The data again show that Asian Americans lag behind whites with respect to retirement savings, largely because they are much less likely to have a DB pension. Only 15.5 percent of Asian Americans could expect a DB pension in 2010–2013, compared to 35.4 percent of whites. DB pension coverage has declined in general, but faster for Asian Americans than for whites. The share of Asian Americans with a DB pension dropped from 24.6 percent in the 1990s to 15.5 percent in the years after the Great Recession—a decrease of 9.1 percent. At the same time, the share of whites with a DB pension fell from 39.7 percent to 35.4 percent—a decline equal to 4.3 percent, or less than half the rate of decline among Asian Americans. (see Table 2)

The much lower DB pension coverage among Asian Americans is not offset by much more widespread retirement savings accounts. In 2010–2013, 58.1 percent of Asian Americans had a retirement savings account with a median balance of $67,025. In comparison, 56.6 percent of whites had retirement savings accounts with a median balance of $65,949. (see Table 2)

Finally, Asian American households in the lower half of the income distribution are less likely to be homeowners, to have a DB pension, and to have money in retirement savings accounts than is the case for Asian Americans overall. Moreover, Asian American households in the bottom of the income distribution look relatively similar to whites in the bottom of the income distribution, except that they are much less likely to be homeowners. (see Table 2)

Some of the differences in retirement wealth and homeownership are also due, at least in part, to differences in the age composition and residential distribution of white and Asian American households. Asian American households are considerably younger, on average, than white households. (see Table A4 in the Appendix) Younger households are less likely to be homeowners, more likely to be in jobs without DB pensions, and tend to have had fewer years to accumulate pension wealth of any kind. Moreover, Asian American households are heavily concentrated in urban areas with larger renting populations, a factor which also likely contributes to their lower homeownership rates.

Debt is the other side of the wealth equation. Generally speaking, Asian Americans are less indebted than is the case for whites, although the differences are often comparatively small. (see Table A3 in Appendix) However, the data show some notable differences—for instance, with respect to mortgages.

Mortgages are the most widespread and largest form of debt for all households. Asian Americans are no exception. Close to half—46.1 percent—of Asian Americans owed money on a mortgage or home equity loan in 2010–2013. This is similar to the 49.7 percent of whites who owed money on a mortgage or home equity line. But the amounts owed on mortgages are quite different between Asian Americans and whites; Asian Americans homebuyers owed a median amount of $236,011 in mortgages in 2010–2013, while whites owed $118,515 during the same time. (see Table 3) This is consistent with Asian Americans being concentrated in high-priced housing markets on the East Coast and West Coast.²⁰ As a result, Asian Americans tend to spend a disproportionate amount of their income on housing. The concomitant heavy mortgage indebtedness leaves many Asian Americans more vulnerable to potential house price declines than is the case for whites.

Notably, the data suggest that mortgages are more equally distributed among Asian Americans than among whites; this means that debt exacerbates wealth inequality relative to the distribution of assets among Asian Americans. The share of households with mortgages in the bottom half of the income distributions for Asian Americans and whites are somewhat similar—24.3 percent compared to 29.5 percent in 2010–2013. But the median amounts of mortgages are again much larger for Asian Americans—at $118,056—than for whites, who owed only $72,009 at the same time. (see Table 3) Mortgage debt is larger for Asian Americans across the board, offsetting higher asset values among wealthier Asian Americans and drawing down wealth for poorer Asian Americans. Wealth inequality among Asian Americans is linked to homeownership and the related mortgages. Higher levels of mortgage debt are influenced by living in higher cost-of-living regions, which is more common among Asian American households.

More mortgage debt can also increase the financial vulnerability of homeowners. Being deeper in mortgage debt can increase the chance of foreclosure. It is therefore not surprising that some Asian American groups, specifically Indian-, Korean-, and Vietnamese-Americans in Orlando and Phoenix—areas where the financial crisis hit especially hard—had foreclosure rates in 2010 that were much higher than those of non-Hispanic whites.²¹

Although far smaller than mortgage debt, the share of installment loans—mainly student debt and car loans—among Asian Americans also deserves attention. Student debt and car