https://macropaperwarehouse.com/authors/jiu-lian/Jiu LianHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/racial-disparities-in-crime-and-wealth/https://macropaperwarehouse.com/papers/racial-disparities-in-crime-and-wealth/<p>This paper asks whether racial differences in labor income can simultaneously explain both the crime gap and the wealth gap between Black and White individuals in the United States. The authors build a large-scale overlapping generations (OLG) model in which property crime is endogenously determined — agents choose whether to steal alongside their consumption and savings decisions — while drug-related incarcerations are treated as exogenous, reflecting evidence that racial profiling distorts enforcement independently of offending behavior. The model is calibrated to match several well-documented racial disparities: Black individuals comprise 12.36% of the adult population but 33.8% of the incarcerated population; 42.7% of Black individuals fall in the bottom wealth quintile (below $3,400 in assets) versus 15.1% of White individuals; the median Black-White wealth gap is 89.5% (SCF 2019). Data sources include the Survey of Consumer Finances (SCF 2019), Uniform Crime Reports (UCR 1996–2011), NLSY79, PSID (1968–2021), and MORG (2000–2019).</p>