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22 posts on "Rajashri Chakrabarti"
February 7, 2024

Racial and Ethnic Wealth Inequality in the Post‑Pandemic Era

Editor’s note: The DFA data upon which this post was based show a decline in the aggregate real wealth of Black households after 2019, as reported here. The authors are currently reviewing the data to determine whether a similar pattern exists for the typical Black household. (March 1, 3:47 pm)

Decorative illustration: 3 people on a pedestal. Whose net worth increased?

Wealth is unevenly distributed across racial and ethnic groups in the United States. In this first post in a two-part series on wealth inequality, we use the Distributional Financial Accounts (DFA) to document these disparities between Black, Hispanic, and white households from the first quarter of 2019 to the third quarter of 2023 for wealth and a variety of asset and liability categories. We find that these disparities have been exacerbated since the pandemic, likely due to rapid growth in the financial assets more often held by white individuals.

January 18, 2023

Young, Less Educated Faced Higher Inflation in 2021—But Gaps Now Closed

Illustration: Inflation: what's changed? short arrow with college grad at the top; higher arrow with a non grad at the top.

We continue our series on inflation disparities by looking at disparities in inflation rates by educational attainment and age for the period June 2019 to the present. Remarkably, we find that disparities by age and education are considerably larger than those by income and are similar in size to those by race and ethnicity, both explored in our previous post. Specifically, during the inflationary period of 2021-22, younger people and people without a college degree faced the highest inflation, with steadily widening gaps relative to the overall average between early 2021 and June 2022, followed by a rapid narrowing of the gaps and a reversal of some of them by December 2022. This pattern arises primarily from a greater share of the expenditures of younger people and people without a college degree being devoted to transportation—particularly used cars and motor fuel—which led the 2021 inflationary episode but has since converged to general inflation.

Inflation Disparities by Race and Income Narrow

illustration: Inflation: who's more affected now? three races at different levels of a line chart.

As inflation has risen to forty-year highs, inflation inequality—disparities in the rates of inflation experienced by different demographic and economic groups– has become an increasingly important concern. In this three-part blog series, we revisit our main finding from June—that inflation inequality has increased across racial and ethnic groups—and provide estimates of differential inflation rates across groups based on income, education, age, and geographic location. We also use an updated methodology for computing inflation disparities by focusing on more disaggregated categories of spending, which corroborates our earlier findings and substantiates our conclusion that inflation inequality is a pronounced feature of the current inflationary episode.

October 20, 2022

How Have Racial and Ethnic Earnings Gaps Changed after COVID‑19?

Decorative: Illustration of three different ethnic figures standing on top of three bars measuring at different heights.

Racial and ethnic earnings disparities have been salient features of the U.S. economy for decades. Between the pandemic-driven recession in 2020 and the rising inflation since 2021, workers’ real and nominal earnings have seen rapid change. To get a sense of how recent economic conditions have affected earnings disparities, we examine real and nominal weekly earnings trends for Asian, Black, Hispanic, and white workers. We find that average real weekly earnings have been declining in the past year, but less so for Black and Hispanic workers than for white and Asian workers. Black and Hispanic workers have also experienced small increases in real earnings since the pre-pandemic period.

July 7, 2022

Climate Change: Implications for Macroeconomics

photo: windmill and solar farm

What are the implications of climate change, and climate change–related policies, for macroeconomics in general and monetary policy in particular? This is the key question debated at a recent symposium on “Climate Change: Implications for Macroeconomics” organized by the Applied Macroeconomics and Econometrics Center (AMEC) of the New York Fed on May 13. This post briefly summarizes the content of the discussion and provides links to recordings of the various sessions and the participants’ slides.

June 30, 2022

Was the 2021‑22 Rise in Inflation Equitable?

Illustration: Prices: Who's paying more? shopping cart with dollar sign and up arrow.

In our previous post, we discussed how the labor market recovery—the “maximum employment” half of the Federal Reserve System’s dual mandate—featured not only a return of overall employment rates to pre-pandemic levels, but also a narrowing of racial and ethnic gaps in employment rates. In this post, we take up the second half of the dual mandate—price stability—and discuss heterogeneity in inflation rates faced by different demographic groups during the rise in inflation in
2021-22. We find that, in contrast to inequalities in employment rates, disparities in inflation rates have widened during the recent inflationary episode, with Black and Hispanic Americans experiencing more inflation.

How Equitable Has the COVID Labor Market Recovery Been?

Illustration: Jobs: Did the employment rat differ by race? two figures with briefcases, one white, one black

One of the two monetary policy goals of the Federal Reserve System— one-half of our dual mandate—is to aim for “maximum employment.” However, labor market outcomes are not monolithic, and different demographic and economic groups experience different labor market outcomes. In this post, we analyze heterogeneity in employment rates by race and ethnicity, focusing on the COVID-19 recession of March-April 2020 and its aftermath. We find that the demographic employment gaps temporarily increased during the onset of the pandemic but narrowed back by spring 2022 to close to where they were in 2019. In the second post of this series, we will focus on heterogeneity in inflation rates, the second part of our dual mandate.

August 2, 2021

Who Received Forbearance Relief?

Forbearance on debt repayment was a key provision of the CARES Act, legislation intended to combat the widespread economic losses stemming from the COVID-19 pandemic. This pause on required payments for federally guaranteed mortgages and student loans has provided temporary relief to those affected by the COVID-19 pandemic, and servicers of nonfederal loans often provided forbearances or other relief on request as well. Here, using a special survey section fielded with the August 2020 Survey of Consumer Expectations, we aim to understand who benefitted from these provisions. Specifically, were there differences by age, race, income, and educational background? Did individuals who suffered job or income losses benefit differentially? Did renters receive more or less nonhousing debt relief than homeowners? Answers to these questions are not only key for understanding the economic recovery and implications for inequality and equitable growth, they can provide important insight into the expected effects of more recent and potential future legislation.

June 30, 2021

Banking the Unbanked: The Past and Future of the Free Checking Account

Banking the Unbanked: The Past and Future of the Free Checking Account

About one in twenty American households are unbanked (meaning they do not have a demand deposit or checking account) and many more are underbanked (meaning they do not have the range of bank-provided financial services they need). Unbanked and underbanked households are more likely to be lower-income households and households of color. Inadequate access to financial services pushes the unbanked to use high-cost alternatives for their transactional needs and can also hinder access to credit when households need it. That, in turn, can have adverse effects on the financial health, educational opportunities, and welfare of unbanked households, thereby aggravating economic inequality. Why is access to financial services so uneven? The roots to part of this problem are historical, and in this post we will look back four decades to changes in regulation, shifts in the ownership structure of retail financial services, and the decline of free/low-cost checking accounts in the United States to search out a few of the contributory factors.

May 27, 2021

COVID‑19 and Small Businesses: Uneven Patterns by Race and Income

The COVID-19 pandemic resulted in one of the sharpest recessions and recoveries in U.S. history. As the virus spread over the country in a matter of weeks in March 2020, most states rapidly locked down nonessential economic activity, which plummeted as a result. As the first wave of COVID-19 subsided and people gradually learned to “live with the virus,” states reversed most of the initial lockdowns and economic activity rebounded. In our ongoing Economic Inequality series, we have explored many aspects of how the economic turmoil associated with COVID-19 differentially affected households. Here, we turn to small business experience. The first post in this three-part installment seeks to understand if there was variance in small business activity across counties that differed by income and race. In two companion posts, we investigate the experience of small businesses in terms of credit access, looking at characteristics of who received and who benefited from the Paycheck Protection Program (PPP). The analysis finds inequalities in PPP credit access as well as differences in the loan and recipient county characteristics for those who received loans through financial technology (fintech) providers versus other lenders.

Posted at 10:45 am | Permalink
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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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