Slavery, education, and inequality

•We study the effect of slavery on current income inequality in the US.•We find that slavery raises inequality and in particular racial inequality.•The main channel of transmission is human capital accumulation.

We investigate the effect of slavery on the current level of income inequality across US counties. We find that a larger proportion of slaves over population in 1860 persistently increases inequality, and in particular inequality across races. We also show that a crucial channel of transmission from slavery to racial inequality is human capital accumulation, i.e., current inequality is primarily influenced by slavery through the unequal educational attainment of blacks and whites. Finally, we provide suggestive evidence that the underlying links run through the political exclusion of former slaves and the resulting negative influence on the local provision of education.