By Raj Chetty and David Williams, Time Magazine, February 20, 2020
Economic disparities between racial groups have persisted for centuries in America. To understand the drivers of these disparities, we analyzed new data on 20 million children to examine how economic outcomes change across generations: not just where people are today, but where their children will likely end up. We find that race matters—even among families in the same socioeconomic class. For example, black children born to low-income parents have just a 2.5% chance of rising to the top fifth of the household-income distribution as adults. White children born into families with the same income are four times more likely to reach that threshold.
Perhaps most surprising, the data reveal that growing up in a high-income family provides no insulation from these disparities. Black children have very high rates of downward mobility, such that even when they grow up in affluent families, they still have a very strong likelihood of ending up at the bottom of the income distribution.
For white Americans, pursuing the American Dream is like climbing an income ladder. For black Americans, it’s more like being on a treadmill: even after you climb out of poverty in one generation, there is a very high probability of the next generation being pulled back down.
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