The researchers contend that the analysis shows that for
comparably situated individuals, blacks, whites, and Hispanics respond in a
similar fashion in terms of joining a 401(k) plan and deciding how much to contribute.
Using data from the Survey of Consumer Finances for 2001,
2004, and 2007, the CRR found about 55% of whites and blacks are eligible to
participate in a 401(k) plan, while only 37% of Hispanic workers are. However,
more than 77% of whites who are eligible actually participate in their
employer’s 401(k) plan, compared to less than 70% of blacks and Hispanics.
The average percent of salary whites contribute to their
plans is 6.5%, compared to 5.9% for blacks and 5.5% for Hispanics. Even after
controlling for age, job tenure, and earnings, these patterns persist.
However, the researchers found the ethnic discrepancies
no longer existed once socioeconomic factors and plan characteristics were
taken into account.
Their report cited studies that added to the equation information
on whether the individual graduated from college, non-pension wealth, defined
benefit wealth (the present discounted value of expected benefits), and whether
the individual owns a home – a proxy for having a longer planning horizon. Considering
these factors, race is no longer a determinant of plan participation.
In the case of the contribution decision, studies that
considered characteristics of the plan, such as the nature of the employer
match and the ability to borrow, found the combination of individual and plan
characteristics completely eliminates the relevance of race/ethnicity in the
case of blacks and Hispanics.
Interestingly, in all cases, Asians seem to participate
more and contribute more than any other race studied.