Understanding how macroeconomic crises exacerbate and disrupt racial and socioeconomic disparities is the focus of a new study led by Vellore Arthi, economics assistant professor, UC Irvine and faculty research fellow, National Bureau of Economic Research (NBER). Funded by a $75,818 grant from the Russell Sage Foundation - part of a larger $122,045 grant joint with UC Davis - Arthi and her colleagues are examining over 100 years of bank records and Census data to determine the role major shocks have played in both breaking down and entrenching inequities.

“As the COVID-19 pandemic has made clear, crises tend to disproportionally harm those who are already disadvantaged,” says Arthi who specializes in research on long-term and intergenerational consequences of crises. “However, if large enough, these events can also be disruptive to long-standing economic structures that inhibit upward mobility.”

Preliminary results suggest that the Great Depression may have temporarily disrupted key racialized features of the American economy, accelerating migration out of the South and to urban areas, and contributing to upward occupational mobility, particularly for Black men. Ongoing work examines the role of Depression-era policies, many of which implicitly or explicitly excluded Black workers, in these outcomes.

Arthi’s co-investigators on this project include Gary Richardson, economics professor, UCI and research associate, NBER, and Katherine Eriksson, economics associate professor, UC Davis, and research associate, NBER.

Funding for this work began in July and runs through June 2023.