Differences in wealth, evidence from structural regression decomposition, 1850-1870

James E. CURTIS Jr.

Abstract


Abstract. Recent studies have used regression decomposition to analyze recent data and found that over seventy percent of the black-white wealth differences remained unexplained (See, e.g., Gittleman & Wolff 2000; Altonji, Doraszelski & Segal 2000; and Blau & Graham 1990). Their results are limited to the variation in modern data. This study contributes improved methodology and historical empirical results to the literature on economic discrimination. In this paper, (i) presents structural regression decompositions, which are modifications to methods developed by Becker (1957) and Oaxaca (1973); (ii) presents a basic empirical test when analyzing structural regression decompositions; (iii) reports the estimated sources of black-white differences in wealth directly before and after emancipation; (iv) links these findings to recent studies. Empirical estimates confirm that the size and persistence of modern black-white wealth differences have historical roots. (v) presents decision-making considerations of “individuals” in an economy with grouped individuals, owners of firms, and social planner(s), conditional on wealth constraints with applied social economic considerations.

Keywords. Theory of economic discrimination, Structural regression decomposition, Wealth inequality.

JEL. J70, D90, E20, C20, H50, N30.

Keywords


Theory of economic discrimination; Structural regression decomposition; Wealth inequality.

Full Text:


References


Ashenfelter, O., & Ham, J. (1979). Education, unmemployment and earnings, Journal of Political Economy, 87(5), 99-116. doi. 10.1086/260824

Altonji, J.G., Doraszelski, U., & Segal, L. (2000). Black/White differences in wealth, Federal Reserve Bureau of Chicago Economic Perspectives, 24(1), 38-50.

Bailey, M.J. (1959). Note on the economics of residential zoning and urban renewal, Land Economics, 35(3), 288-292. doi. 10.2307/3144825

Becker, G.S. (1957). The Economics of Discrimination, Chicago: Chicago, 1957.

Berlin, I. (1974). Slaves Without Masters: The Free Negro in the Antebellum South, New York: Pantheon.

Birnbaum, H., & Weston, R. (1974). Homeownership and the Wealth Position of Black and White Americans, Review of Income and Wealth, 20(1), 103-118. doi. 10.1111/j.1465-7295.1992.tb01537.x

Blau, F., & Graham, J. (1990). Black-White differences in wealth and asset composition, Quarterly Journal of Economics, 105(2), 321-339. doi. 10.2307/2937789

Blinder, A. (1973). Wage discrimination: Reduce form and structural estimates, Journal of Human Resources, 8(4), 436-455. doi. 10.2307/144855

Bodenhorn, H. (1999). The economic consequences of color among free negroes in rural antebellum south, Working Paper, Lafayette College.

Bodenhorn, H. (1999). The mulatto advantage: The biological consequences of complexion in rural antebellum Virginia, Working Paper, Lafayette College, June. doi. 10.1162/00221950260029002

Chang, A.C. (1984). Fundamental Methods of Mathematical Economics, Third Edition, New York: Mc-Graw Hill.

Chiteji, N., & Stafford, F. (1999). Portfolio choices of parents as young adults: Asset accumulation by African American families, American Economic Review: Papers and Proceedings, 89(2), 377-380. doi. 10.1257/aer.89.2.377

Coelho, P.R., & Shepherd, C.F. (1974). Differences in regional prices: The United States, 1851-1880, Journal of Economic History, 34(3), 551-591. doi. 10.1017/S0022050700079808

Conley, D. (1999). Being Black, Living in the Red: Race Wealth, and Social Policy in America, Berkeley: University of California.

DuBois, W.E.B. (1899). The Philadelphia Negro: A Social Study, New York: Schocken.

Franklin, S., & Smith, J.D. (1977). Black-White differences in income and wealth, American Economic Review: Papers and Proceedings, 67(1), 405-409.

Friedman, M.A (1957). Theory of the Consumption Function, Princeton: Princeton University Press.

Gittleman, M., & Wolff, E.N. (2000). Racial wealth disparities: Is the gap closing, Social Science Research Network Working Paper, No.311. [Retrieved from].

Greene, W. (1997). Econometric Analysis, New Jersey: Princeton Hall.

Ham, J. (1982). Estimation of a labor supply model with censoring due to unemployment and underemployment, Review of Economic Studies, 49(3), 335-354.

Ham, J., Jakubson, G., & Reilly, K. (1998). Sectoral shocks, unemployment and intertemporal labor supply, Working Paper.

Hamburg, M. (1989). Statistical Analysis for Decision Making, San Diego: Harcourt Brace Jovanvich.

Higgs, R. (1982). Accumulation of property by Southern Blacks before World War I, American Economic Review, 72(4), 725-737.

Hornsby, A. (1989). The accumulation of wealth by black Georgians, 1890-1915, Journal of Negro History, 74(1), 11-30. doi. 10.1086/JNHv74n1-4p11

Hoy, M. et. al. (1996). Mathematics for Economics, Ontario: Addison-Wesley.

Hurst, E. (1998). The wealth dynamics of American families, 1884-94, Brookings Papers on Economic Activity, 1, 267-337.

Juhn, C. (1991). Accounting for the slowdown in black-white wage convergence, in H.M. Kosters (ed.), Workers and Their Wages, DC: American Enterprise Institute.

Keister, L.A. (2000). Family structure, race and wealth ownership: A longitudinal exploration of wealth accumulation processes, Social Science Research Network Working Paper, No.304. [Retrieved from].

Magnuson, D.L. (1940). The making of a modern census: The United States census of population, 1790-1940, University of Minnesota (Doctoral Dissertation).

Magnuson, D.L. (1995). Who and what determined the content of the U.S. population schedule over time, Historical Methods, 28(1), 11-26. doi. 10.1080/01615440.1995.9955309

Magnuson, D.L. & King, M.L. (1995). Comparability of the public use of microdata samples: Enumeration procedures, Historical Methods, 28(1), 27-32. doi. 10.1080/01615440.1995.9955310

Margo, R. (1984). Accumulation of property by southern blacks before World War I: Comment and further evidence, American Economic Review, 74(4), 768-774.

Margo, R.R. (1990). Schooling in the South: 1880-1915, An Economic History, Chicago: University of Chicago Press.

Masson, A. (1986). A cohort analysis of wealth-age profiles generated by a simulation model in France (1949-75), The Economic Journal, 96(381), 173-190. doi. 10.2307/2233432

Menchik, P., & Jianakopolis, N. (1997). Black-White wealth inequality: Is inheritance the reason?, Economic Inquiry, 35, 428-442. doi. 10.1111/j.1465-7295.1997.tb01920.x

Mirer, T.W.(1979). The wealth-age relation among the aged, American Economic Review, 69(3), 434-443.

Mincer, J. (1974). Schooling, and Earnings, in NBER Book Chapter, Schooling Experience and Earnings, (pp.41-63).

Moldigiani, F., & Brumberg, R. (1955). Utility analysis and the consumption function: An interpretation of cross-section data, in K. Kurihara (Ed), Post- Keynesian Economics, London: George Allen.

Oliver, M.L. (1989). Race and wealth, Review of Black Political Economy, 71(4), 5-25.

Oliver, M.L., & Shapiro, T.M. (1997). Black Wealth/White Wealth: A Perspective of Racial Inequality, New York: Routledge.

Oaxaca, R. (1973). Male-female wage differences in urban labor markets, International Economic Review, 14(3), 693-709. doi. 10.2307/2525981

Oaxaca, R., Ransom, M. (1999). Identification in detailed wage decompositions, Review of Economics and Statistics, 81(1), 154-157. doi. 10.1162/003465399767923908

Pennsylvania Abolition Society, (1838). The Present State and Condition of the People of Color of the City of Philadelphia and Adjoining Districts, Philadelphia.

Ruggles, S., & Sobek, M. (1997). Integrated Public Use Microdata Series: Version 2.0, Minneapolis: Historical Census Projects, University of Minnesota.

Segal, L.M., & Sullivan, D.G. (1998). Trends in homeownership: Race, demographics, and income, Federal Reserve Bureau of Chicago, Economic Perspectives, 2, 52-72.

Shorrocks, A.F. (1978). The measurement of mobility, Econometrica, 46(5), 1013-1024. doi. 10.2307/1911433

Snyder, D.C. (1989). A database with income and assets of new retirees by race and hispanic origin, Review of Black Political Economy, 71(4), 5-25.

Society of Friends, (1849). Statistical Inquiry into the Condition of the Free People of the City and Districts of Philadelphia, Philadelphia.

Soltow, L. (1972). A century of personal wealth accumulation, in H.G. Vatter & T. Palm (ed), The Economics of Black America, (pp.80-84), New York: Harcourt Brace Jovanovich.

Soltow, L. (1975). Men & Wealth in the United States. New Haven: Yale.

Steckel, R.H. (1990). Poverty and prosperity: A longitudinal study of wealth accumulation, 1850-1860, The Review of Economics and Statistics, 72(2), 275-285. doi. 10.2307/2109717

Steckel, R.H. (1991). The quality of census data for historical inquiry: A research agenda, Social Science History, 15(4), 579-599. doi. 10.1017/S0145553200021313

Steckel, R. (2000). The African American population of the United States, 1790-1920, in A Population History of North America.

Terrell, H.S. (1971). Wealth accumulation of Black and White families: The empirical evidence, Journal of Finance, 26(2), 363-77.

US Census Office, (1864). The Eighth Census of the United States: 1860, Washington: Government Printing Office.

Weiss, T. (1992). U.S. labor force estimates and economic growth, 1800-1860, in R.E. Gallman & J. Wallis (Eds.), American Economic Growth and Standards of Living Before the Civil War, (pp.19-78), Chicago: University of Chicago.

Wolff, E. (1992). Changing inequality of wealth, American Economic Review: Papers and Proceedings of the One Hundred and Fourth Annual Meeting of the American Economic Association, 82(2), 552-558. doi. 10.1257/aer.p20161036

Wolff, E. (1998). Recent trends in the size distribution of household wealth, Journal of Economic Perspectives, 12(3), 131-150. doi. 10.1257/jep.12.3.131

Woodson, C.G. (1924). Free Negro Owners of Slaves in the United States in 1830, New York: Negro Universities, 1924.

Wright, C.D. (1900). The History and Growth of the United States Census, Washington: Government Printing Office.

Yitzhaki, S.(1987). The relation between return and income, Quarterly Journal of Economics, 102(1), 77-95. doi. 10.2307/1884681




DOI: http://dx.doi.org/10.1453/jest.v5i1.1567

Refbacks

  • There are currently no refbacks.




Journal of Economic and Social Thought - J. Econ. Soc. Thoug. - JEST - www.kspjournals.org

ISSN: 2149-0422

Editor: jest@ksplibrary.org   Secretarial: secretarial@ksplibrary.org   Istanbul - Turkey.

Copyright © KSP Library