The Racial Wealth Gap and the Role of Firm Ownership
- (pp. 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.Citation
Lipton, Avi. 2022. "The Racial Wealth Gap and the Role of Firm Ownership." AEA Papers and Proceedings, 112: 351-55. DOI: 10.1257/pandp.20221110Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- N32 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: 1913-