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Race and Economic Well-Being in the United States

Author

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  • Jean-Felix Brouillette
  • Charles I. Jones
  • Peter J. Klenow

Abstract

We construct a measure of consumption-equivalent welfare for Black and White Americans. Our statistic incorporates life expectancy, consumption, leisure, and inequality. Based on this incomplete list of factors, welfare for Black Americans was 43% of that for White Americans in 1984 and rose to 59% by 2019. Going back further in time (albeit with more limited data), the gap was even larger, with Black welfare equal to just 29% of White welfare in 1940. On the one hand, there has been remarkable progress for Black Americans: the level of their consumption-equivalent welfare increased by a factor of 26 between 1940 and 2019, when aggregate consumption per person rose a more modest 5-fold. On the other hand, despite this remarkable progress, the welfare gap in 2019 remains disconcertingly large. The gap appears even larger when we make rough attempts to incorporate omitted factors such as morbidity, incarceration, and unemployment.

Suggested Citation

  • Jean-Felix Brouillette & Charles I. Jones & Peter J. Klenow, 2021. "Race and Economic Well-Being in the United States," NBER Working Papers 29539, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29539
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    Cited by:

    1. Job Boerma & Loukas Karabarbounis, 2023. "Reparations and Persistent Racial Wealth Gaps," NBER Macroeconomics Annual, University of Chicago Press, vol. 37(1), pages 171-221.
    2. Daniel Albuquerque & Tomer Ifergane, 2023. "The Racial Wealth Gap: the Role of Entrepreneurship," Discussion Papers 2310, Centre for Macroeconomics (CFM).
    3. Curtis, Chadwick & Garín, Julio & Lester, Robert, 2022. "Working, consuming, and dying: Quantifying the diversity in the american experience," Journal of Economic Dynamics and Control, Elsevier, vol. 138(C).
    4. Victoria Gregory & Julian Kozlowski & Hannah Rubinton, 2022. "The Impact of Racial Segregation on College Attainment in Spatial Equilibrium," Working Papers 2022-036, Federal Reserve Bank of St. Louis, revised 27 Nov 2024.
    5. Eden, Maya, 2023. "Quantifying racial discrimination in the 1944 G.I. bill," Explorations in Economic History, Elsevier, vol. 90(C).

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    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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