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Race and Economic Well-Being in the United States

We construct a measure of consumption-equivalent welfare for Black and White Americans. Our statistic incorporates life expectancy, consumption, leisure, and inequality, with mortality rates playing a key role quantitatively. According to our estimates, welfare for Black Americans was 43% of that for White Americans in 1984 and rose to 60% by 2019. Going back further in time (albeit with more limited data), the gap was even larger, with Black welfare equal to just 28% of White welfare in 1940. On the one hand, there has been remarkable progress for Black Americans: the level of their consumption-equivalent welfare increased by a factor of 28 between 1940 and 2019, when aggregate consumption per person rose a more modest 5-fold. On the other hand, despite this remarkable progress, the welfare gap in 2019 remains disconcertingly large. Mortality from COVID-19 has temporarily reversed a decade of progress, lowering Black welfare by 17% while reducing White welfare by 10%.

Jean-Felix Brouillette
Charles I Jones
Peter J Klenow
Publication Date
December, 2021