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Determinants of US Inequality: Disparities Within or Between Ethnic Groups?

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Listed:
  • Oded Galor
  • Daniel C. Wainstock

Abstract

Is income inequality in the United States primarily driven by disparities between ethnic groups or within them? Contrary to conventional wisdom, this study uncovers a striking and transformative empirical regularity: an overwhelming 96% of contemporary inequality arises from disparities within groups sharing a common ancestral origin, dwarfing the comparatively minor contribution of inequality between groups. This extraordinary pattern persists across time, educational attainment, demographic characteristics, and geographic regions. The findings represent a shift in the empirical understanding of inequality in the United States, revealing that the deepest and most persistent economic divides run within, rather than between, ethnic communities.

Suggested Citation

  • Oded Galor & Daniel C. Wainstock, 2025. "Determinants of US Inequality: Disparities Within or Between Ethnic Groups?," CESifo Working Paper Series 12245, CESifo.
    • Handle: RePEc:ces:ceswps:_12245
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    References listed on IDEAS

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    1. Emmanuel Saez & Gabriel Zucman, 2020. "The Rise of Income and Wealth Inequality in America: Evidence from Distributional Macroeconomic Accounts," Journal of Economic Perspectives, American Economic Association, vol. 34(4), pages 3-26, Fall.
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    Keywords

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    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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