Welfare Access and Inactivity Gaps: Revisiting the Racial Divergence in Unemployment Rates

ABSTRACT This paper examines the divergence in unemployment rates between Black and White men in the United States that emerged after 1930. We argue that labor force participation can serve as a proxy for studying unemployment trends among men aged 25 to 54, helping to address limitations in historical data. Using U.S. Census data, we revisit conventional explanations, such as the Great Migration and the Great Depression, and show that these events do not appear to, by themselves, fully account for the growing racial gap in inactivity and unemployment rates. Instead, we present empirical evidence suggesting that welfare incentives, particularly those associated with the New Deal relief programs, may offer an additional perspective on the observed patterns. By encouraging welfare migration, relief programs may have contributed to the long‐term racial divergence in unemployment rates.