Document Type

Working Paper

Publication Date

9-2025

Abstract

Disadvantaged social groups in the US suffered disproportionately in the covid pandemic and Great Recession, worsening high levels of inequality associated with their post-1980 declining intergenerational income mobility. For black Americans this reflects the long history of racial discrimination beginning with slavery. Reparations paid to descendants of enslaved individuals to eliminate the black-white wealth gap is a step toward addressing this history. A further needed step is to build predominantly black communities human and social capital through public investments in community health care centers (CHCs) and historically black colleges and universities (HBCUs). There is considerable evidence that investments in early childhood education positively affect later school performance, income and earnings, higher education, crime, and other well-being outcomes. CHCs and HBCUs promote early childhood education. This paper argues compensation is due to both individuals and their communities, and reparations payments should be accompanied by public investments in those communities.

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