Darity was born in Norfolk, Virginia,[13] and spent time in his childhood in Beirut, Lebanon; Alexandria, Egypt; and Chapel Hill, North Carolina.

Darity Jr. graduated magna cum laude with a bachelor's degree from Brown University in 1974, where he earned honors in economics and political science.

[11] He has also either taught or served as a fellow at London School of Economics and Political Science, the University of Tulsa and the Centro de Excelencia Empresarial (Monterey, Mexico).

Previous recipients include Nobel Laureate Sir W. Arthur Lewis, Phyllis Ann Wallace and Marcus Alexis.

[11][12] The institute's stated mission is "to help lead scholarly investigation into all aspects of black life, as well as public and private policies and programs affecting their lives.

[7] Darity's research has been wide-ranging, but a central organizing theme of his work has been exploration of multiple aspects of economic inequality.

That interest has led him to examine the phenomenon of colorism, discrimination in the labor market and "marriage market" outcomes, parallels between caste inequality in India and racial inequality in the United States, ethnic diversity and conflict, the social psychological effects of exposure to unemployment, and schooling and the racial achievement gap.

[18] With Major Coleman and Rhonda Sharpe, Darity was a member of a team that found in a paper published in the American Journal of Economics and Sociology in 2008 that white workers tend to grossly over-report their exposure to discrimination in the workplace, while black workers tend to grossly under-report their exposure to discrimination in the workplace.

[19] With economist Darrick Hamilton, Darity has proposed a federal asset building program aimed at remediating the racial wealth gap.

A long-time advocate of a federal job guarantee, in 2012, in response to the protracted economic crisis produced by the Great Recession, Darity called for establishment of the National Investment Employment Corps, assuring all U.S. citizens over the age of 18 employed work at a salary above the poverty line as well as the standard benefits package for all civil servants, including medical coverage and retirement savings.

[22][23] In 1989, while preparing the introduction for a volume of essays, edited by Richard America, by economists gauging the size of a reparations fund for African Americans, Darity became convinced that a program of redress of this type is an essential step that must be taken by the nation.

[16] In 2020, with A. Kirsten Mullen, he published From Here to Equality: Reparations for Black Americans in the Twenty-First Century, a book that synthesized and extended his previous work on the topic.

As a leading voice in the current national conversation on African American reparations, Darity argues recipients must be black Americans whose ancestors were enslaved in the United States, the monetary target must be sufficient funds to eliminate black-white differences in average wealth, the federal government must execute the program, and the major form of outlays must be direct payments to eligible recipients.