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Why do African Americans have low rates of income mobility?

There is a lot to unpack in the new National Bureau of Economic Research article, “Race and Economic Opportunity in the United States: An Intergenerational Perspective.”

In their hefty working paper, Raj Chetty, Nathaniel Hendren, Maggie Jones, and Sonya Porter examine data for nearly the entire U.S. population from 1989 to 2015.  The report outlined their three major findings:

  • First, the intergenerational persistence of disparities varies substantially across racial groups.  For example, Hispanic Americans are moving up significantly in the income distribution across generations because they have relatively high rates of intergenerational income mobility. In contrast, black Americans have substantially lower rates of upward mobility and higher rates of downward mobility than whites, leading to large income disparities that persist across generations.
  • Second, differences in family characteristics such as parental marital status, education, and wealth explain very little of the black-white income gap conditional on parent income.
  • Third, the black-white gap persists even among boys who grow up in the same neighborhood.

They conclude,

Our fi ndings suggest that many widely discussed proposals may be insufficient to narrow the black-white gap in the long run. Policies focused on improving the economic outcomes of a single generation (such as cash transfer programs or minimum wage increases) can narrow the gap at a given point in time, but are less likely to have persistent e ffects unless they also a ffect intergenerational mobility. Policies that reduce residential segregation or enable black and white children to attend the same schools without achieving racial integration within neighborhoods and schools would also likely leave much of the gap in place, since the gap persists even among low-income children raised on the same block.

Chetty and his coauthors propose a close examination of mentoring programs for black boys and assessments of programs that cultivate productive interactions between racial groups within neighborhoods.  Given their findings, however, it’s clear that the authors are not sure how policymakers should tackle the problem.

Perhaps trying new things is a good place to start.

Terry Stoops / Director of the Center for Effective Education | John Locke Foundation

Terry Stoops is the Vice President for Research and Director of Education Studies at the John Locke Foundation. Before joining the Locke Foundation, he worked as the progra...