Black-White Differences in Inter-Generational Economic Mobility in the U.S.

52 Pages Posted: 3 Dec 2011

Date Written: December 1, 2011

Abstract

Traditional measures of inter-generational mobility such as the inter-generational 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 inter-racial differences in inter-generational mobility. The study uses two data sources including one that contains social security earnings for a large inter-generational 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 co-variates 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 inter-generational mobility.

Suggested Citation

Mazumder, Bhashkar, Black-White Differences in Inter-Generational Economic Mobility in the U.S. (December 1, 2011). US Census Bureau Center for Economic Studies Paper No. CES-WP- 11-40, Available at SSRN: https://ssrn.com/abstract=1967466 or http://dx.doi.org/10.2139/ssrn.1967466

Bhashkar Mazumder (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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