Bradley Hardy (Georgetown; Google Scholar) presents Stalled Progress? Five Decades of Black-White and Rural-Urban Income Gaps (with Shria Holla (B.S. 2024, Kentucky), Elizabeth Krause (PhD 2026, Kentucky) & James P. Ziliak (Kentucky; Google Scholar)), at Georgetown today as part of its Tax Law and Public Finance Workshop hosted by Emily Satterthwaite and Dayanand Manoli:
Black-White income inequality in the U.S. has persisted for generations (Smith and Welch 1989; Bayer and Charles 2018). While much less studied, similar group-level differences have also persisted across the rural-urban divide in the U.S. (Lichter and Ziliak 2017). These differences include yawning gaps in education attainment, access to capital, and opportunities for upward economic mobility, among others. Much of the extant literature among economists has focused on labor-market outcomes of employment, wages, and earnings, especially among Black and White men. However, because many aspects of the U.S. tax and transfer system are targeted to lower-income households, it is possible that the redistributive features of the social safety net have improved the distribution of after-tax and transfer income of Black and rural households relative to White and urban households, respectively. To investigate these trends, we assemble five decades of data from the 1976-2022 Current Population Survey Annual Social and Economic Supplement (CPS ASEC) to make a comparative assessment of after-tax and transfer Black-White and rural-urban household income gaps, accounting for redistributive tax and transfer programs.
Our overall results depict a stunning lack of economic progress for Black households relative to Whites in the U.S. Similarly, the tax and transfer system has not offered any differential redistribution to rural households over this time period either. Rural residents with lower and moderate levels of income do improve their relative rank with urban residents, but no such progress occurs when comparing residents above the middle of the income distribution.
