Intergenerational Economic Mobility and the Racial Wealth Gap

Jermaine Toney and Cassandra L. Robertson

AEA Papers and Proceedings, 2021, vol. 111, 206-10

Abstract: A growing body of research documents the importance of wealth and the racial wealth gap in perpetuating inequality across generations. We examine the impact of wealth on child income. Our two-stage least squares regressions reveal that grandparental wealth has an important effect on the younger generation's stock, which in turn affects the younger generation's household income. We further explore the relationship between income and wealth by decomposing the child's income by race. We find that the intergroup disparity in income is mainly attributable to differences in family background. These findings indicate that wealth is an important source of income inequality.

JEL-codes: D31 D63 J15 J62 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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DOI: 10.1257/pandp.20211113

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