Determinants of US inequality: disparities within or between ethnic groups?

Working paper

Is income inequality in the United States primarily driven by disparities between ethnic groups or within them? Contrary to conventional wisdom, this study uncovers a striking and transformative empirical regularity: an overwhelming 96% of contemporary inequality arises from disparities within groups sharing a common ancestral origin, dwarfing the comparatively minor contribution of inequality between groups. This extraordinary pattern persists across time, educational attainment, demographic characteristics, and geographic regions. The findings represent a shift in the empirical understanding of inequality in the United States, revealing that the deepest and most persistent economic divides run within, rather than between, ethnic communities.

Authors: Galor, O; Wainstock, DC

• Publication status: Published
• Publisher: University of Oxford
• Series: Department of Economics Discussion Paper Series
• Place of publication: Oxford, UK
• Publication date: 2025-11-07
• Paper number: 1092
• Language: English
• Keywords: inequality; within group inequality; ethnicity; between group inequality