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Most research on differences in earnings between Black and white individuals has focused on differences at a point in time—for example, over the course of a month or a year. However, this approach may understate labor market inequality between Black and white individuals, especially if their lifetime employment differs. Differences in the incidence of unemployment may translate into differences in years worked over an entire career. Thus, entire lifetime earnings histories may provide a more accurate picture of labor market inequality.

In this article, Andrew Glover, José Mustre-del-Río, and Emily Pollard go beyond point-in-time measures of earnings and examine lifetime earnings differences between Black and white individuals. They find that, on average, Black individuals earn about one-third less than white individuals over the course of their lifetimes (a difference equivalent to about $550,000), though the size of this gap varies by sex and education level. In addition, they find that differences in years worked, which are not captured by point-in-time measures, contribute substantially to earnings differences between Black and white individuals.

Publication information: Vol. 108, no. 1
DOI: 10.18651/ER/v108n1GloverMustredelRioPollard

Authors

Andrew Glover

Senior Economist

Andrew Glover is a senior economist in the economic research department at the Federal Reserve Bank of Kansas City. His research studies labor and credit markets from a macroecon…

José Mustre-del-Río

Research and Policy Officer

José Mustre-del-Río is a Research and Policy Officer at the Federal Reserve Bank of Kansas City. He joined the Economic Research Department in August 2011. Prior to joining the d…