The Financial Wealth of African Americans after Slavery and its Intergenerational Impacts: Evidence from the Collapse of the Freedman's Bank

Richard Hornbeck, Professor of Economics

This project explores the intergenerational consequences of low financial wealth among African Americans following emancipation from slavery. We examine impacts of lost household wealth due to the 1874 bankruptcy of the Freedman's Bank. Some depositers lost substantial wealth, equivalent to the cost of 40 acres of land after the Civil War (a payment proposed as reparations for slavery). By merging Freedman's Bank records to the Census of Population in 1870, and matching household decendant through later Census waves, we will estimate impacts of this loss on later generations. We anticipate these results will be interesting regardless of our estimates: an absence of effects on later generations would suggest that initial low levels of financial wealth are not a substantial driving factor of later racial disparities in education, income, and wealth; by contrast, substantial impacts on later generations will focus attention on initial racial disparities in financial wealth and highlight continued effects of slavery through household finances.