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The United States of America, arguably the least racist country on the planet, continues to draw would-be immigrants of all backgrounds from all over the world. Unfortunately the U.S. may now be turning away too many of them, but new research affirms that the aspiring entrants are not crazy—this really is a land where your ethnicity does not dictate your success. In a new working paper published by the National Bureau of Economic Research, economists Oded Galor of Brown and Daniel Wainstock of Oxford explore conditions
that correlate with economic success in the U.S. Like many academics, the authors appear to be focused on income inequality as a problem to be solved, which perhaps will make their findings especially compelling. The authors first make their case for the importance of determining whether income inequality is driven by membership in particular ethnic groups: Inequality between ethnic groups could sow seeds of resentment, fragment the social fabric, and erode trust, fueling tensions, polarization, and conflict. Such a divide might marginalize segments of society, preventing their full engagement in the economic landscape and undermining efficiency, accumulation, and innovation. In contrast, inequality within ethnic groups often
reflects disparities in access to education, credit markets, and other formative opportunities that shape individuals’ skills and life trajectories—constraints that may hinder human capital formation, limit mobility, and impede economic growth. Determining the roots of inequality could be indispensable to the pursuit of economic efficiency and social cohesiveness. If inequality stems predominantly from gaps between ethnic groups, policies aimed at reducing intergroup disparities—affirmative action, targeted social programs, and anti-discrimination legislation—may be particularly suitable for narrowing inequality. Yet if inequality emerges primarily within ethnic groups, remedies may prove more effective when oriented toward the
unequal distribution of resources and opportunities within communities. Policies designed to expand access to quality education, financial markets, and healthcare, while removing mobility barriers based on income rather than ethnicity, could yield a more pronounced reduction in aggregate inequality. The authors then describe what they did and what they found: This paper examines inequality within the U.S. population, exploring variations between and within ethnic groups. Leveraging the ancestral origins of a representative sample of the U.S. population, consisting of millions of U.S.-born, working-age individuals, the study decomposes income inequality
into within-group and between-group components, distinguishing disparities among those sharing a common ancestry from inequality between groups originating from different ancestries.
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