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Racial Differentials in the Wealth Effects of the Financial Crisis and Great Recession

Author

Listed:
  • Ryan Compton

    (University of Manitoba)

  • Daniel Giedeman

    (Grand Valley State University)

  • Leslie Muller

    (Grand Valley State University)

Abstract

The financial crisis of 2007–2009 was arguably the most severe financial crisis in American history and the subsequent Great Recession was the worst economic downturn in the USA since the Great Depression. In this paper, we analyze data from the Panel Survey of Income Dynamics (PSID) to examine the effects of the crisis and recession on the wealth of White and Black families using graphical, cross section, and panel empirical models. While other studies have measured the short-term effects of the crisis and recession on American household wealth, we are able to look at longer-term wealth effects by incorporating data from the recently released 2015 wave of the PSID. Our results indicate that the negative consequences of the economic downturn on Black families’ wealth were severe and longer-lasting than for White families.

Suggested Citation

  • Ryan Compton & Daniel Giedeman & Leslie Muller, 2018. "Racial Differentials in the Wealth Effects of the Financial Crisis and Great Recession," Journal of Economics, Race, and Policy, Springer, vol. 1(2), pages 126-141, September.
    • Handle: RePEc:spr:joerap:v:1:y:2018:i:2:d:10.1007_s41996-018-0015-7
    DOI: 10.1007/s41996-018-0015-7
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    Cited by:

    1. Marina Gindelsky, 2022. "Do transfers lower inequality between households? Demographic evidence from Distributional National Accounts," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1233-1257, July.
    2. Jermaine Toney & Darrick Hamilton, 2022. "Economic insecurity in the family tree and the racial wealth gap," Review of Evolutionary Political Economy, Springer, vol. 3(3), pages 539-574, October.
    3. Jermaine Toney, 2022. "Is there wealth stability across generations in the U.S.? Evidence from panel study, 1984–2017," Contemporary Economic Policy, Western Economic Association International, vol. 40(4), pages 551-567, October.

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    More about this item

    Keywords

    D31; I31; J15;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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