Determinants of US Inequality: Disparities Within or Between Ethnic Groups?

Oded Galor and Daniel Wainstock

No 12245, CESifo Working Paper Series from CESifo

Abstract: Is income inequality in the United States primarily driven by disparities between ethnic groups or within them? Contrary to conventional wisdom, this study uncovers a striking and transformative empirical regularity: an overwhelming 96% of contemporary inequality arises from disparities within groups sharing a common ancestral origin, dwarfing the comparatively minor contribution of inequality between groups. This extraordinary pattern persists across time, educational attainment, demographic characteristics, and geographic regions. The findings represent a shift in the empirical understanding of inequality in the United States, revealing that the deepest and most persistent economic divides run within, rather than between, ethnic communities.

Keywords: inequality; ethnicity; within group inequality; between group inequality (search for similar items in EconPapers)
JEL-codes: D63 J15 O15 Z13 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-evo, nep-lab and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12245

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