Black-White Differences in Intergenerational Economic Mobility in the US

57 Pages Posted: 1 Dec 2011

Date Written: November 28, 2011

Abstract

Traditional measures of intergenerational mobility such as the intergenerational elasticity are not useful for inferences concerning group differences in mobility with respect to the pooled income distribution. This paper uses transition probabilities and measures of “directional rank mobility” that can identify interracial differences in intergenerational mobility. The study uses two data sources including one that contains social security earnings for a large intergenerational sample. I find that recent cohorts of blacks are not only significantly less upwardly mobile but also significantly more downwardly mobile than whites. This implies a steady-state distribution in which there is no racial convergence in income. A descriptive analysis using covariates reveals that test scores in adolescence can explain much of the racial difference in both upward and downward mobility. Family structure can account for some of the racial gap in upward mobility but not downward mobility. Completed schooling and parental wealth also appear to account for some of the racial gaps in intergenerational mobility.

Keywords: intergenerational mobility, race, Job, Occupational, and Intergenerational Mobility, Promotion, Human Capital, Skills, Occupational Choice, Labor Productivity, Economics of Minorities, Races, Immigrants, Non-labor Discrimination

JEL Classification: J62, J24, J15

Suggested Citation

Mazumder, Bhashkar, Black-White Differences in Intergenerational Economic Mobility in the US (November 28, 2011). FRB of Chicago Working Paper No. 2011-10. Available at SSRN: https://ssrn.com/abstract=1966690 or http://dx.doi.org/10.2139/ssrn.1966690

Bhashkar Mazumder (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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