IDEAS home Printed from https://ideas.repec.org/p/lev/wrkpap/wp_880.html
   My bibliography  Save this paper

The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being

Author

Listed:
  • Thomas Masterson
  • Ajit Zacharias
  • Fernando Rios-Avila
  • Edward N. Wolff

Abstract

The Great Recession had a tremendous impact on low-income Americans, in particular black and Latino Americans. The losses in terms of employment and earnings are matched only by the losses in terms of real wealth. In many ways, however, these losses are merely a continuation of trends that have been unfolding for more than two decades. We examine the changes in overall economic well-being and inequality as well as changes in racial economic inequality over the Great Recession, using the period from 1989 to 2007 for historical context. We find that while racial inequality increased from 1989 to 2010, during the Great Recession racial inequality in terms of the Levy Institute Measure of Economic Well-Being (LIMEW) decreased. We find that changes in base income, taxes, and income from nonhome wealth during the Great Recession produced declines in overall inequality, while only taxes reduced between-group racial inequality.

Suggested Citation

  • Thomas Masterson & Ajit Zacharias & Fernando Rios-Avila & Edward N. Wolff, 2017. "The Great Recession and Racial Inequality: Evidence from Measures of Economic Well-Being," Economics Working Paper Archive wp_880, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_880
    as

    Download full text from publisher

    File URL: http://www.levyinstitute.org/pubs/wp_880.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Burkhauser & Shuaizhang Feng & Stephen Jenkins & Jeff Larrimore, 2011. "Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 393-415, September.
    2. La Ferrara, Eliana & Mele, Angelo, 2006. "Racial Segregation and Public School Expenditure," CEPR Discussion Papers 5750, C.E.P.R. Discussion Papers.
    3. Joachim R. Frick & Jan Goebel & Edna Schechtman & Gert G. Wagner & Shlomo Yitzhaki, 2006. "Using Analysis of Gini (ANOGI) for Detecting Whether Two Subsamples Represent the Same Universe," Sociological Methods & Research, , vol. 34(4), pages 427-468, May.
    4. Edward N. Wolff & Ajit Zacharias & Thomas Masterson, 2012. "Trends In American Living Standards And Inequality, 1959–2007," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(2), pages 197-232, June.
    5. William A. Darity Jr., 1982. "The Human Capital Approach to Black-White Earnings Inequality: Some Unsettled Questions," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 72-93.
    6. Smith, James P & Welch, Finis, 1979. "Inequality: Race Differences in the Distribution of Earnings," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 515-526, June.
    7. Stephanie Aaronson & Tomaz Cajner & Bruce Fallick & Felix Galbis-Reig & Christopher Smith & William Wascher, 2014. "Labor Force Participation: Recent Developments and Future Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 197-275.
    8. Olugbenga Ajilore, 2008. "The Impact of the Earned Income Tax Credit on Poverty: Analyzing the Dimensions by Race and Immigration," The Review of Black Political Economy, Springer;National Economic Association, vol. 35(4), pages 117-127, December.
    9. Frick, Joachim R. & Goebel, Jan & Schechtman, Edna & Wagner, Gert G. & Yitzhaki, Shlomo, 2006. "Using Analysis of Gini (ANOGI) for Detecting Whether Two Subsamples Represent the Same Universe: The German Socio-Economic Panel Study (SOEP) Experience," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(4), pages 427-468.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Serge Atherwood & Gabriela Sánchez-Soto, 2023. "Does Social Class Matter Equally for the Timely Transition Into and Out of College? Evidence from the NLSY97," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(1), pages 95-128, February.
    2. Mehmet E. Yaya, 2018. "Great Recession and Income Inequality: a State-level Analysis," Journal of Economics, Race, and Policy, Springer, vol. 1(2), pages 112-125, September.

    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. Barrington-Leigh, C.P., 2024. "The econometrics of happiness: Are we underestimating the returns to education and income?," Journal of Public Economics, Elsevier, vol. 230(C).
    2. Gornig, Martin & Goebel, Jan, 2018. "Deindustrialisation and the polarisation of household incomes: The example of urban agglomerations in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(4), pages 790-806.
    3. Andrew E. Clark & Sarah Flèche & Claudia Senik, 2016. "Economic Growth Evens Out Happiness: Evidence from Six Surveys," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 405-419, September.
    4. M. Grazia Pittau & Shlomo Yitzhaki & Roberto Zelli, 2011. "The make-up of a regression coefficient: An application to gender," DSS Empirical Economics and Econometrics Working Papers Series 2011/3, Centre for Empirical Economics and Econometrics, Department of Statistics, "Sapienza" University of Rome.
    5. S. Anger & J. R. Frick & J. Goebel & M. M. Grabka & O. Groh-Samberg & H. Haas & E. Holst & P. Krause & M. Kroh & H. Lohmann & R. Pischner & J. Schupp & I. Sieber & T. Siedler & C. Schmitt & C. K. Spie, 2008. "Zur Weiterentwicklung von SOEPsurvey und SOEPservice," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 77(3), pages 157-177.
    6. Jan Goebel & Markus M. Grabka & Peter Krause & Martin Kroh & Rainer Pischner & Ingo Sieber & Martin Spieß, 2008. "Mikrodaten, Gewichtung und Datenstruktur der Längsschnittstudie Sozio-oekonomisches Panel (SOEP)," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 77(3), pages 77-109.
    7. Luis Ayala & Javier Martín‐Román & Juan Vicente, 2020. "The contribution of the spatial dimension to inequality: A counterfactual analysis for OECD countries," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 447-477, June.
    8. Amit Shelef & Edna Schechtman, 2021. "A Gini-based analysis of the differences between men and women in the labor market over time," Working Papers 2102, Ben-Gurion University of the Negev, Department of Economics.
    9. Mark Wooden & Ning Li, 2014. "Panel Conditioning and Subjective Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(1), pages 235-255, May.
    10. Alessio Guandalini, 2022. "Things you should know about the Gini index," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 76(4), pages 4-12, October-D.
    11. repec:csb:stintr:v:12:y:2010:i:3:p:597-614 is not listed on IDEAS
    12. Saurabh & R. V. Ramanamurthy, 2023. "Employment status and wealth inequality between scheduled caste and other caste households in India," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 25(1), pages 1-16, June.
    13. Chadi, Adrian, 2013. "The role of interviewer encounters in panel responses on life satisfaction," Economics Letters, Elsevier, vol. 121(3), pages 550-554.
    14. Martin Gornig & Jan Goebel, 2014. "Deindustrialization and Tertiarization and the Polarization of Household Incomes: The Example of German Agglomerations," ERSA conference papers ersa14p1172, European Regional Science Association.
    15. Ulrike Stein, 2017. "Earnings Inequality in Germany: A Decomposition-Analysis," SOEPpapers on Multidisciplinary Panel Data Research 955, DIW Berlin, The German Socio-Economic Panel (SOEP).
    16. Ulrich Schimmack & Peter Krause & Gert Wagner & Jürgen Schupp, 2010. "Stability and Change of Well Being: An Experimentally Enhanced Latent State-Trait-Error Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 95(1), pages 19-31, January.
    17. Emanuela Raffinetti & Elena Siletti & Achille Vernizzi, 2017. "Analyzing the Effects of Negative and Non-negative Values on Income Inequality: Evidence from the Survey of Household Income and Wealth of the Bank of Italy (2012)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(1), pages 185-207, August.
    18. Arslan, Aslıhan & Taylor, J. Edward, 2010. "Village level inequality, migration and remittances in rural Mexico: How do they change over time?," Kiel Working Papers 1622, Kiel Institute for the World Economy (IfW Kiel).
    19. Mauro Mussini, 2010. "On the Link between Silber and Dagum Decomposition of the Gini Index," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 11(3), pages 597-614, December.
    20. Michele Costa, 2016. "Overlapping component and inequality decomposition: a simulation study for the Gini index," METRON, Springer;Sapienza Università di Roma, vol. 74(2), pages 193-205, August.
    21. Ellis Scharfenaker, Markus P.A. Schneider, 2019. "Labor Market Segmentation and the Distribution of Income: New Evidence from Internal Census Bureau Data," Working Paper Series, Department of Economics, University of Utah 2019_08, University of Utah, Department of Economics.

    More about this item

    Keywords

    LIMEW; United States; Great Recession; Race; Distribution of Wealth; Distribution of Income;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • 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

    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:lev:wrkpap:wp_880. 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: Elizabeth Dunn (email available below). General contact details of provider: http://www.levyinstitute.org .

    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.