IDEAS home Printed from https://ideas.repec.org/p/crm/wpaper/26163.html

Blindly Discriminating: The GI Bill and Racial Inequality

Author

Listed:
  • Christiane Szerman
  • Lukas Althoff

Abstract

The World War II GI Bill was the largest education subsidy in US history and a cornerstone of the postwar US transition to a knowledge economy. Although formally race-blind, the program's decentralized administration left implementation to local officials and segregated institutions, with sharply different consequences for Black and white veterans. This paper quantifies the GI Bill's impact on Black and white Americans' economic outcomes across two generations, using a regression discontinuity around WWII service eligibility cutoffs and a new data linkage from veterans in the 1940 and 1950 censuses to their sons' neighborhood outcomes between 1990 and 2025. The GI Bill widened racial inequality, doubling white veterans' college completion while steering Black veterans into often-fraudulent vocational programs with no earnings returns. The disparities persisted across generations, increasing the white-Black gap in sons' adult-neighborhood outcomes, including a 5-percentage-point (47 percent) widening of the racial college gap. Unequal returns to the same eligibility account for the intergenerational gap, with no contribution from prewar differences in socioeconomic status or geography. In sum, access to the GI Bill was not nearly the same economic opportunity for Black Americans as it was for white Americans, highlighting that race-blind policy does not guarantee racial equality.

Suggested Citation

  • Christiane Szerman & Lukas Althoff, 2026. "Blindly Discriminating: The GI Bill and Racial Inequality," RFBerlin Discussion Paper Series 26163, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26163
    as

    Download full text from publisher

    File URL: https://www.rfberlin.com/wp-content/uploads/2026/06/26163.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Card & Alan B. Krueger, 1992. "School Quality and Black-White Relative Earnings: A Direct Assessment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 151-200.
    2. Turner, Sarah & Bound, John, 2003. "Closing the Gap or Widening the Divide: The Effects of the G.I. Bill and World War II on the Educational Outcomes of Black Americans," The Journal of Economic History, Cambridge University Press, vol. 63(1), pages 145-177, March.
    3. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    4. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
    5. John Bound & Sarah Turner, 2002. "Going to War and Going to College: Did World War II and the G.I. Bill Increase Educational Attainment for Returning Veterans?," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 784-815, October.
    6. Ran Abramitzky & Leah Boustan & Katherine Eriksson & James Feigenbaum & Santiago Pérez, 2021. "Automated Linking of Historical Data," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 865-918, September.
    7. repec:oup:qjecon:v:136:y:2021:i:1:p:169-228. is not listed on IDEAS
    8. Daniel K. Fetter, 2013. "How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-century GI Bills," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 111-147, May.
    9. Anna Aizer & Ryan Boone & Adriana Lleras-Muney & Jonathan Vogel, 2020. "Discrimination and Racial Disparities in Labor Market Outcomes: Evidence from WWII," NBER Working Papers 27689, National Bureau of Economic Research, Inc.
    10. Martha J. Bailey & Connor Cole & Morgan Henderson & Catherine Massey, 2020. "How Well Do Automated Linking Methods Perform? Lessons from US Historical Data," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 997-1044, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lukas Althoff & Christiane Szerman, 2026. "Blindly discriminating: the GI Bill and racial inequality," CEP Discussion Papers dp2194, Centre for Economic Performance, LSE.
    2. Althoff, Lukas & Szerman, Christiane, 2026. "Blindly Discriminating: The GI Bill and Racial Inequality," IZA Discussion Papers 18720, IZA Network @ LISER.
    3. Collins, William J. & Zimran, Ariell, 2025. "World War II service and the GI Bill: New evidence on selection and veterans’ outcomes from linked census records," Explorations in Economic History, Elsevier, vol. 96(C).
    4. Lleras-Muney, Adriana & Morgan, Tommy & Price, Joseph & Wygal, William, 2025. "The effect of World War II spending and army service on the lifespan of the Black population," Explorations in Economic History, Elsevier, vol. 97(C).
    5. Dan Black & Natalia Kolesnikova & Lowell Taylor, 2009. "Earnings Functions When Wages and Prices Vary by Location," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 21-47, January.
    6. Behrman, Jere R., 1996. "Measuring the effectiveness of schooling policies in developing countries: Revisiting issues of methodology," Economics of Education Review, Elsevier, vol. 15(4), pages 345-364, October.
    7. Solomon Polachek, 2003. "Mincer's Overtaking Point and the Life Cycle Earnings Distribution," Review of Economics of the Household, Springer, vol. 1(4), pages 273-304, December.
    8. Kalpana Pai, 2008. "The Impact of Educational Attainment on Labor Market Outcomes," LIS Working papers 475, LIS Cross-National Data Center in Luxembourg.
    9. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    10. Deniz Ozabaci & Daniel Henderson, 2015. "Additive kernel estimates of returns to schooling," Empirical Economics, Springer, vol. 48(1), pages 227-251, February.
    11. Morris M. Kleiner & Evan J. Soltas, 2019. "A Welfare Analysis of Occupational Licensing in U.S. States," Staff Report 590, Federal Reserve Bank of Minneapolis.
    12. Domnisoru, Ciprian & Malinovskaya, Anna & Taylor, Evan J., 2025. "Education and Mortality: Evidence for the Silent Generation from Linked Census and Administrative Data," IZA Discussion Papers 18085, IZA Network @ LISER.
    13. Nick Feltovich & Chris Papageorgiou, 2004. "An Experimental Study of Statistical Discrimination by Employers," Southern Economic Journal, John Wiley & Sons, vol. 70(4), pages 837-849, April.
    14. Chen, Yi & Jiang, Sheng & Zhou, Li-An, 2020. "Estimating returns to education in urban China: Evidence from a natural experiment in schooling reform," Journal of Comparative Economics, Elsevier, vol. 48(1), pages 218-233.
    15. Hanushek, Eric A. & Luque, Javier A., 2003. "Efficiency and equity in schools around the world," Economics of Education Review, Elsevier, vol. 22(5), pages 481-502, October.
    16. Jamie H. Douglas & Michael D. Steinberger, 2015. "The Sexual Orientation Wage Gap for Racial Minorities," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(1), pages 59-108, January.
    17. Danielle Lewis & Dek Terrell, 2001. "Experience, Tenure, and the Perceptions of Employers," Southern Economic Journal, John Wiley & Sons, vol. 67(3), pages 578-597, January.
    18. Megan D. Thomas, 2017. "WWII GI Bill and its Effect on Low Education Levels: Did the World War II GI Bill have an Effect on High School Completion, Poverty, and Employment?," Education Finance and Policy, MIT Press, vol. 12(4), pages 492-515, Fall.
    19. Juanna Schrøter Joensen, 2010. "Timing and Incentives: Impacts of Student Aid on Academic Achievement," 2010 Meeting Papers 823, Society for Economic Dynamics.
    20. James J. Feigenbaum & Hui Ren Tan, 2019. "The Return to Education in the Mid-20th Century: Evidence from Twins," NBER Working Papers 26407, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • 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
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:crm:wpaper:26163. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Moritz Lubczyk or Matthew Nibloe (email available below). General contact details of provider: https://edirc.repec.org/data/cmucluk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.