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Intergenerational Economic Mobility and the Racial Wealth Gap

Author

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  • Jermaine Toney
  • Cassandra L. Robertson

Abstract

A growing body of research documents the importance of wealth and the racial wealth gap in perpetuating inequality across generations. We examine the impact of wealth on child income. Our two-stage least squares regressions reveal that grandparental wealth has an important effect on the younger generation's stock, which in turn affects the younger generation's household income. We further explore the relationship between income and wealth by decomposing the child's income by race. We find that the intergroup disparity in income is mainly attributable to differences in family background. These findings indicate that wealth is an important source of income inequality.

Suggested Citation

  • Jermaine Toney & Cassandra L. Robertson, 2021. "Intergenerational Economic Mobility and the Racial Wealth Gap," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 206-210, May.
    • Handle: RePEc:aea:apandp:v:111:y:2021:p:206-10
    DOI: 10.1257/pandp.20211113
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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