The Color of Wealth in Baltimore is part of a series of reports that examines the social and economic conditions of people of color among six metropolitan areas in the United States: Los Angeles, DC, Tulsa, Miami, Boston, and Baltimore. The purpose of this report is twofold: First, the report details racial differences in asset and debt accumulation, household income, intergenerational asset transfers, and household net worth across the city of Baltimore. Second, the report assesses the impact of household exposure to incarceration on household income and wealth accumulation. While most research focuses on the direct financial impact of incarceration on an individual, in the form of removal from the labor force or the penalty of a criminal record on subsequent employment, this report sheds light on the impact of incarceration on wealth accumulation.

Our findings show a statistically significant racial gap in earnings and net worth and an incarceration penalty on earnings and wealth accumulation. Interestingly, the white-black racial household income and wealth gaps disappear when the reference group is whites with incarceration exposure. This reveals that statistically speaking, the size of the racial gap is equivalent to the incarceration penalty. Our racial gap decompositions based on incarceration exposure also corroborate these results. We find no statistically significant difference in the earnings between blacks with and without incarceration exposure. These findings are very troubling and suggest that society’s association of blackness with criminality has a similar effect to that of the incarceration penalty.