Analytic Approaches to Measuring the Black-White Wealth Gap

Jermaine Toney, Fenaba R. Addo and Darrick Hamilton

AEA Papers and Proceedings, 2024, vol. 114, 186-90

Abstract: Does the measurement of the racial wealth gap shift depending on the model, method, and dataset used? We contrast the traditional mean Oaxaca-Blinder decomposition with the distributional Recentered Influence Function (RIF) methods. The untransformed, logarithm-transformed, and inverse hyperbolic sine-transformed versions in both the Survey of Consumer Finances and Panel Study of Income Dynamics datasets exhibit similarities. The Oaxaca-Blinder (mean) decomposition highlights that receiving an inheritance explains a larger portion of the racial wealth gap than educational attainment. Conversely, the RIF method at the median suggests that educational attainment accounts for more of the wealth gap than inheritance receipt.

JEL-codes: D31 G51 I20 J15 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1257/pandp.20241124

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