The Racial Wealth Gap and the Role of Firm Ownership

Avi Lipton

AEA Papers and Proceedings, 2022, vol. 112, 351-55

Abstract: This paper develops an overlapping generations model that isolates the impact of the US racial wealth gap in 1962 on the long-run dynamics of wealth. The model predicts that one component of the initial gap, firm ownership, coupled with the intergenerational transfer of that ownership results in a permanent wealth gap independent of other dimensions of inequality. This implies that even if all discrimination against Black Americans had ceased upon the end of Jim Crow, the wealth gap would have persisted without a reparations policy addressing the fact that the initial firm ownership gap arose in the first place.

JEL-codes: D31 G32 J15 N32 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1257/pandp.20221110

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