Race and economic opportunity in the United States: Summary

Race and economic opportunity in the United States. Raj Chetty, Nathaniel Hendren, Maggie R. Jones, Sonya R. Porter. Vox, Jun 27 2018. https://voxeu.org/article/race-and-economic-opportunity-united-states

The sources of racial disparities in income have been debated for decades. This column uses data on 20 million children and their parents to show how racial disparities persist across generations in the US. For instance, black men have much lower chances of climbing the income ladder than white men even if they grow up on the same block. In contrast, black and white women have similar rates of mobility. The column discusses how such findings can be used to reduce racial disparities going forward.

Finding #1: Hispanic Americans are moving up in the income distribution across generations, while Black Americans and American Indians are not.

Finding #2: The black.white income gap is entirely driven by differences in men's, not women's, outcomes.

Finding #3: Differences in family characteristics (parental marriage rates, education, wealth) and differences in ability explain very little of the black.white gap.

Finding #4: In 99% of neighbourhoods in the United States, black boys earn less in adulthood than white boys who grow up in families with comparable income.

Finding #5: Both black and white boys have better outcomes in low-poverty areas, but black-white gaps are bigger in such neighbourhoods.

Finding #6: Within low-poverty areas, black.white gaps are smallest in places with low levels of racial bias among whites and high rates of father presence among blacks.

Finding #7: The black.white gap is not immutable: black boys who move to better neighbourhoods as children have significantly better outcomes.