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Working Paper
Updating the Racial Wealth Gap
Using newly available data from the Survey of Consumer Finances, this paper updates and extends the literature exploring the racial wealth gap. We examine several hypotheses proposed by previous researchers, including the importance of inherited wealth and other family support and that of trends in local real estate markets, and also extend the literature by exploring the gap across the distribution of wealth and simultaneously considering white, African American and Hispanic households. The findings indicate that observable factors account for all of wealth gap between white and Hispanic ...
Working Paper
Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle
We examine racial disparities in key labor market outcomes for men and women over the past four decades, with a special emphasis on their evolution over the business cycle. Blacks have substantially higher and more cyclical unemployment rates than whites, and observable characteristics can explain very little of this differential, which is importantly driven by a comparatively higher risk of job loss. In contrast, the Hispanic-white unemployment rate gap is comparatively small and is largely explained by lower educational attainment of (mostly foreign-born) Hispanics. Regarding labor force ...
Working Paper
Assessing Differences in Labor Market Outcomes Across Race, Age, and Educational Attainment
Broad indicators are often used to evaluate the health of the labor market but may mask disparities in outcomes across age, education, gender, and race. Understanding these disparate outcomes is part of the process of monitoring the labor market. As such, this paper summarizes work the research staff of the Federal Reserve Bank of Kansas City has done to better understand differences in labor market outcomes. Some of these findings reinforce earlier work, while others offer novel perspectives. {{p}} First, differences in outcomes across race remain substantial. Despite a significant increase ...
Working Paper
Does Differential Treatment Translate to Differential Outcomes for Minority Borrowers? Evidence from Matching a Field Experiment to Loan-Level Data
This paper provides evidence on the relationship between differential treatment of minority borrowers and their mortgage market outcomes. Using data from a field experiment that identifies differential treatment matched to real borrower transactions in the Home Mortgage Disclosure Act (HMDA) data, we estimate difference-in-difference models between African American and white borrowers across lending institutions that display varying degrees of differential treatment. Our results show that African Americans are more likely to be in a high-cost (subprime) loan when borrowing from lenders that ...
Working Paper
Community Leaders and the Preservation of Cultural Traits
We explain persistent differences in cultural traits of immigrant groups with the presence of community leaders. Leaders influence the cultural traits of their community, which have an impact on the group?s earnings. They determine whether a community will be more assimilated and wealthier or less assimilated and poorer. With a leader, cultural integration remains incomplete. The leader chooses more distinctive cultural traits in high-productivity environments and if the community is more connected. Lump-sum transfers to immigrants can hinder cultural integration. These findings are in line ...
Working Paper
Can Wealth Explain Neighborhood Sorting by Race and Income?
Why do high-income blacks live in neighborhoods with characteristics similar to those of low-income whites? One plausible explanation is wealth, since homeownership requires some wealth, and black households hold less wealth than white households at all levels of income. We present evidence against this hypothesis by showing that wealth does not predict sorting into neighborhood quality once race and income are taken into account. An alternative explanation is that the scarcity of high-quality black neighborhoods increases the cost of living in a high-quality neighborhood for black households ...
Working Paper
An Empirical Analysis of Racial Segregation in Higher Education
This descriptive paper documents how segregation between blacks and whites across colleges in the United States has evolved since the 1960s. It also explores potential channels through which changes are occurring, and it uses recent data to study the issue of segregation within colleges. The main findings are as follows: (1) White exposure to blacks has been rising since the 1960s, whereas black exposure to whites increased sharply in the late 1960s and early 1970s and has fluctuated since then. Meanwhile, black-white dissimilarity and the Theil index fell sharply in the late 1960s and early ...
Working Paper
Affirmative Action and Racial Segregation
A number of states have recently prohibited the use of affirmative action in admissions to public universities statewide. A growing body of research suggests that these affirmative action bans reduce minority enrollment at selective colleges while leaving overall minority college enrollment rates unchanged. The effect of these bans on racial segregation across colleges has not yet been estimated directly and is theoretically ambiguous due to a U-shaped relationship between minority enrollment and college selectivity. This paper uses variation in the timing of affirmative action bans across ...
Working Paper
Migration Constraints and Disparate Responses to Changing Job Opportunities
Using the Current Population Survey between 1996 and 2018, this paper investigates the role constraints to migration might play in explaining racial/ethnic disparities in the labor market. The Delta Index of dissimilarity is used to illustrate a greater distributional mismatch between race/education specific workers and jobs among minorities relative to white non-Hispanics. Regression analysis then shows that this mismatch is consistent with minorities being less responsive to changes in the distribution of job opportunities. However, minorities are more responsive when the growing job ...
Working Paper
Levels and trends in the income mobility of U.S. families, 1977−2012
Much of America?s promise is predicated on economic mobility?the possibility that people can move up and down the economic ladder during their lifetimes. Mobility is of particular consequence when economic disparities are increasing. Using panel data and mobility concepts and measures adapted from the literature, this paper examines 10-year income mobility levels and trends for U.S. working-age families during the time span 1977?2012. According to many measures, mobility, already limited in the 1978?1988 decade, declined over ensuing decades: families? later-year incomes increasingly depended ...