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Overestimates of the Racial Wealth Gap and of the Case for Reparations

Author

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  • Tatom, John

    (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)

Abstract

The racial wealth gap indicates relative wellbeing, but wealth differs for many reasons. For example, Black family heads are nine years younger. Adjusting for this reduces 2019 median white family wealth from 7.8 times as large to 4.6 times as large and the shortfall of overall Black wealth from $1.6 trillion to $1.4 trillion. Second, it shows the difference from using averages instead of medians, the representative measure when wealth is not normally distributed. Using averages assumes wealth differs only due to race and raises the Black shortfall to $8.4 trillion. Regardless of the size of the wealth gap, however, this paper argues that there is a long history of analyses of the bases for reparations, whose potential amounts were unrelated to the existence or size of a racial wealth gap. Most of those hypotheses and estimates are inconsistent with recent proposals to eliminate the gap using reparations

Suggested Citation

  • Tatom, John, 2022. "Overestimates of the Racial Wealth Gap and of the Case for Reparations," Studies in Applied Economics 208, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    • Handle: RePEc:ris:jhisae:0208
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    More about this item

    Keywords

    wealth; redistribution; racial wealth gap; reparations;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H13 - Public Economics - - Structure and Scope of Government - - - Economics of Eminent Domain; Expropriation; Nationalization

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