Analyzing How the Effects of Federal Policies May Differ by Race and Ethnicity
CBO describes the agency's efforts to increase its capacity to analyze how budgetary and economic conditions or developments may affect various demographic groups (including groups based on race and ethnicity) differently.
Many Members have asked whether the Congressional Budget Office can provide information on how the effects of federal policies differ by race and ethnicity. This letter updates you regarding the agency's efforts to increase its capacity to analyze how budgetary and economic conditions or developments may affect various demographic groups (including groups based on race and ethnicity) differently.
Over the past few years, CBO has examined different outcomes among demographic groups in a number of contexts. For example, in July 2020, CBO described the race and ethnicity, sex, age, education, and household earnings of the 19 million people who were expected to receive regular unemployment benefits in that month. More recently, CBO examined the effects of the pandemic on the employment of men and women of different races and ethnicities.
Those types of analyses can be challenging to produce because of limitations in the data. In response to Congressional interest in how policies affect people in different groups, CBO is seeking to enhance its capabilities, building on its earlier work and existing models. For example, CBO may use methods to statistically combine detailed income tax data from tax returns with survey data, and it has proposed to the Census Bureau a project to evaluate the accuracy of such statistically matched data.
This letter provides more detail on the challenges regarding data availability and describes CBO's ongoing efforts to increase the agency's capacity to analyze budgetary and economic outcomes for various demographic groups.