March 26, 2018

Unprecedented study reveals true scale of income gap for American black men

Unprecedented study reveals true scale of income gap for American black men

Black boys in America grow up to earn less in adulthood than their white peers, even when they come from the highest socio-economic backgrounds, a new study has revealed.

The research, which uses anonymous earnings and demographic data for virtually all Americans now in their late 30s, shows that black boys that grow up in wealthy families are less likely to remain wealthy as adults than they are to end up in lower income brackets.

Discussing the findings, Nathaniel Hendren, a Harvard economist and an author of the study, said that the size of the income gap and level of downward mobility show that black boys of any economic background cannot fully escape “the poverty trap.”

In fact, when looking at children growing up in the same areas and in families with similar parental incomes, black boys fare worse in adulthood than their white peers in 99% of the US.

The research also suggests that there is something unique to the obstacles black men face. Although black girls face deep inequality on various measures, the findings suggest that, unlike black boys, they will grow up to have similar earnings to white girls from families with similar parental incomes.

The gap is also not replicated for other racial groups. Although Hispanics experience a gap with white men, it is substantially narrower than that experienced by black men, and their incomes will converge within a few generations at current mobility levels. Asian-Americans are shown to have a slightly positive gap with white peers at the same income levels. Only Native Americans have an income gap comparable, albeit narrower, to that experienced by black men.

The report finds a potential explanation for the pervasiveness of the gap by looking at areas where black and white boys go on to perform equally well as adults.

Such areas are shown in surveys and tests of racial bias to be characterized as having less discrimination, and are also those where many lower-income black children had fathers at home. Poor black boys did well in such places, whether their own fathers were present or not.

The results therefore suggest that the barriers posed cannot simply be explained by individual or household traits, such as cognitive ability or presence of both parents. Instead, extra-household factors appear to be crucial, with the presence of discrimination towards black males in society, as well as characteristics of the surrounding neighborhoods and the economy all being identified as factors.

Discussing the importance of tackling such racial income inequality for IZA World of Labor, Simonetta Longhi writes: “The skills and talents of racial minorities may be under-utilized if they are prevented from reaching their potential and contributing fully to society.”

“Ultimately, reducing racial wage inequalities is likely to lead to a more cohesive, productive, and egalitarian society.”

Read more articles about Income inequality

For specific expertise on discrimination by race get in touch directly with David Neumark.

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