Race and Economic Well-Being in the United States
Jean-Félix Brouillettea b c d, Charles I. Jonesa b c d e, Peter J. Klenowa b c d f
- aStanford University
- bDepartment of Economics 579 Jane Stanford Way Stanford University Stanford, CA 94305-6072
- cGraduate School of Business Stanford University 655 Knight Way Stanford, CA 94305-4800
- dNATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138
- eGraduate School of Business Stanford University 655 Knight Way Stanford , CA 94305-4800 and
- fDepartment of Economics 579 Jane Stanford Way Stanford University Stanford , CA 94305-6072
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Abstract
We construct a measure of consumption-equivalent welfare for Black and White Americans.Our statistic incorporates life expectancy, consumption, leisure, and inequality, with mortality rates playing a key role quantitatively.According to our estimates, welfare for Black Americans was 43% of that for White Americans in 1984 and rose to 60% by 2019.Going back further in time (albeit with more limited data), the gap was even larger, with Black welfare equal to just 28% of White welfare in 1940.On the one hand, there has been remarkable progress for Black Americans: the level of their consumption-equivalent welfare increased by a factor of 28 between 1940 and 2019, when aggregate consumption per person rose a more modest 5-fold.On the other hand, despite this remarkable progress, the welfare gap in 2019 remains disconcertingly large.Mortality from COVID-19 has temporarily reversed a decade of progress, lowering Black welfare by 17% while reducing White welfare by 10%.