John Jones, Vice President of Microeconomic Analysis Federal Reserve Bank of Richmond

What are the proximate drivers of the Black-White wealth gap? We address this question using a rich life-cycle model that incorporates careful empirical estimates of several potential factors: earnings and employment differences, portfolio composition and returns that vary with wealth and age, family dynamics, mortality gaps, and bequest motives. A prominent feature of our approach is that we study differences across the entire wealth distribution rather than focusing on a single summary statistic such as the median. Preliminary results suggest that earnings differences among the employed account for a significant fraction of the wealth gap in the top half of the distribution while employment differences play a large role at the bottom. The tendency of wealthier households to earn higher portfolio returns widens the gap at the middle and top of the wealth distribution.

DATE: Friday, October 13, 2023

TIME: 3:30-5:00 p.m.

LOCATION: Fronczak 444