Working Paper: NBER ID: w29539
Authors: Jeanfelix Brouillette; Charles I. Jones; Peter J. Klenow
Abstract: 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%.
Keywords: Race; Economic Wellbeing; Welfare; Consumption; Life Expectancy
JEL Codes: I31; J15; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| consumption (E21) | welfare (I38) |
| life expectancy (J17) | welfare (I38) |
| welfare gap narrowing (I38) | consumption (E21) |
| welfare gap narrowing (I38) | life expectancy (J17) |
| COVID-19 mortality (I12) | black welfare (I38) |
| COVID-19 mortality (I12) | white welfare (I30) |
| 1940 black welfare (I38) | 1984 black welfare (I38) |
| 1984 black welfare (I38) | 2019 black welfare (I38) |