The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this article, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the past 150 years, with convergence stalling after 1950. Since the 1980s, the wealth gap has widened again as capital gains have predominantly benefited white households, and convergence via income growth and savings has come to a halt.

A key question in labour market research is how the unemployment insurance system affects unemployment rates and labour market dynamics. We provide new answers to this old question by studying one of the largest unemployment insurance reforms in recent decades, the German Hartz reforms. On average, lower separation rates into unemployment account for 76% of declining unemployment after the reform, a fact unexplained by existing research focussing on job-finding rates. Exploiting institutional changes by age, employment duration, and wages, we establish a causal link between the reform and changes in labour market dynamics. Relying on the labour market theory, we generalize our empirical findings beyond the German case and establish separation rate changes as an important macroeconomic adjustment channel after unemployment insurance reforms. We derive analytically that the change of separation rates increases in proportion to average unemployment duration suggesting an equally important role for most other European labour markets.

We use microdata to show that young households with children are underinsured against the risk that an adult member of the household dies. This empirical finding can be explained by a macroeconomic model with human capital risk, age-dependent returns to human capital investment, and endogenous borrowing constraints due to limited contract enforcement. When calibrated, the model quantitatively accounts for the observed life-cycle variation in life insurance holdings, financial wealth, earnings, and consumption inequality. The model also predicts that reforms making consumer bankruptcy more costly will substantially increase the volume of both credit and insurance.