The Prospect of Equality of Incomes between White and Black Families under Varying Rates of Unemployment

Harold W. Guthrie

Journal of Human Resources, 1970, vol. 5, issue 4, 431-446

Abstract: The values of income quintiles, for black and white families separately, for the period 1947-68 are analyzed within the framework of a growth-unemployment model. Some principal results of the analysis are: (1) In all segments of the income distribution, growth rates of income are higher among black families than among white families when the unemployment rate is low. (2) In the middle range of income distribution, rising unemployment is more disadvantageous to black families than to white families. (3) At a stable 3.5 percent unemployment rate, equality of incomes could be achieved in about 25 years. (4) If unemployment rises to a stable 4.5 percent rate as a result of federal anti-inflationary actions, black families bear a social cost that can be measured in terms of the additional time required to achieve equality-another 25 years. (5) During a period when incomes of black families are growing more rapidly than those of white families, the absolute differences, or gap, will increase to a maximum and then decline. Thus an apparent paradox observed previously in the data can be explained by the growth-unemployment model.

Date: 1970
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