Report

Long shadows: The Black-white gap in multigenerational poverty

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Issues of Black-white inequality and racial injustice have taken center stage over the past year to a degree not seen for a generation. These issues cover a wide range of topics, touching on policing and criminal justice, labor market discrimination, gaps in educational opportunity, social capital inequalities, and the racial wealth gap.

Understanding the ways in which these inequalities have been reproduced across generations is an important first step in creating a more equitable society where upward social mobility and economic opportunities are accessible to all. In our new paper, “Long Shadows: The Black-White Gap in Multigenerational Poverty,” we take a multigenerational perspective on economic inequality by race, showing the persistence of unequal economic opportunity for Black Americans across time. Recent work has highlighted stark disparities in social mobility across two generations for Black and white Americans, but we know relatively little about Black-white gaps in the experience of multigenerational mobility and poverty across more than two generations.

We estimate the Black-white gap in multigenerational poverty across three generations using the Panel Study of Income Dynamics (PSID), which began tracking families in 1968. The PSID allows us to link the incomes of adults today in their 30s with the incomes of their parents and—dating back to the Civil Rights Era—their grandparents. For each generation, we define “poverty” as being in the bottom quintile of the income distribution. Our headline finding is that three-generation poverty is over 16 times higher among Black adults than white adults (21.3 percent and 1.2 percent, respectively). In other words, one in five Black Americans are experiencing poverty for the third generation in a row, compared to just one in a hundred white Americans.

Black families experience higher rates of poverty, less upward mobility, and more downward mobility

There are three mechanisms that could potentially give rise to racial gaps in poverty across multiple generations. First, if the initial poverty rates of earlier generations are sufficiently large, then even if Black and white Americans escape poverty at similar rates, Black poverty would remain more common over time. Second, even if Black Americans did not have higher poverty rates in earlier generations, racial gaps in poverty might persist or widen if Black upward mobility out of poverty is lower than mobility among white Americans. Third, even if Black Americans did not have higher initial poverty rates or less upward mobility, racial gaps might show up if downward mobility rates into poverty are higher for Blacks than for whites. In our analysis, we find that all three factors contribute to today’s income gap; Black Americans experience higher initial poverty rates, less upward mobility, and more downward mobility.

We first observe the income earned by the grandparents of today’s adults around 1970. While only nine percent of today’s white adults in their 30s had a grandparent in the bottom fifth of the income distribution, that was true of 59 percent of today’s Black adults in their 30s. Put another way, of today’s Black and white adults in their 30s, two-thirds (65 percent) of those with a poor grandparent are Black. Clearly, then, initial poverty rates are higher for Black families. If we go back just one generation instead of two and observe the incomes of the parents of today’s adults, we find a similar picture. Among Black adults today, 55 percent had parents in the bottom fifth of the income distribution, compared with just 12 percent of white adults.

But Black families are not only more concentrated at the bottom of the income distribution; they are also less likely to experience upward mobility out of the bottom quintile. Conditional on being raised by a grandparent in the bottom fifth, 66 percent of white parents escaped the bottom fifth as adults. That is only true of 37 percent of Black parents. Among today’s adults in their 30s raised in the bottom fifth, 56 percent of whites and only 42 percent of Blacks have risen out of the bottom.

On top of that, Black adults who were not raised in the bottom fifth are much more likely to fall into poverty than white adults. Among the parents of today’s adults that were raised in the middle fifth of the income distribution, half of Black parents (51 percent) fell into the bottom fifth, compared with just 14 percent of white parents. For today’s adults raised in the middle fifth, a third (33 percent) of Blacks and 13 percent of whites are now in poverty.

Three generations of poverty is almost uniquely a Black experience

For the last two generations, we see higher starting poverty rates, lower upward mobility rates, and higher downward mobility rates for Black families. When we put these findings together, we see stark racial divides in the persistence of multigenerational poverty. Figure 1 shows the percent of Black and white families who experience poverty across one, two, and three generations. In the most recent generation, 42 percent of Black adults in our sample live in poverty compared to 15 percent of white adults. Just five percent of white adults were in the bottom fifth after having parents in the bottom fifth, but that was true of 32 percent of Black adults. Across three generations, just 1.2 percent of white adults, or around one in a hundred, were in the bottom fifth after having grown up with parents and grandparents in the bottom fifth as well. The rate for Black adults, however, is considerably higher, at 21.3 percent.

In other words, experiencing poverty for three generations straight is almost uniquely a Black experience. Black adults in their 30s are over 16 times more likely than white adults to be in the third generation of poverty in a row. In fact, Black Americans are 41 percent more likely to be in third-generation poverty than white Americans are to be poor.

Of those Black and white Americans who experience one, two, and three generations of poverty, Figure 2 shows what share are Black. Once again, the findings are stark. Black Americans make up 44 percent of those experiencing one generation of poverty (even though poverty rates are higher among Black families, they make up a smaller share of the overall population). For two and three generations of poverty, the shares rise to 64 and 83 percent, respectively.

We find that half of Black adults in the bottom fifth today (51 percent) had both a parent and a grandparent in the bottom fifth, but only eight percent of white adults in the bottom fifth had poor parents and grandparents. Multigenerational analyses help us form a more complete picture of the inequalities we see today. By just comparing differences in Black and white income levels today, or mobility rates across just one generation, we understate the extent of racial inequality and obscure the socioeconomic context that gave rise to those gaps.

Mobility policy must focus on opportunities for Black Americans

These descriptive results put the differences in opportunities that Black and white Americans have experienced front and center. These trends are indicative of societal barriers that have persistently inhibited Black upward mobility. While increasing mobility for all is a laudable and broadly popular goal, our results point to the need to focus specifically on Black mobility, or its absence, in the formulation of policy.

Read the full report.

The authors did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. They are currently not an officer, director, or board member of any organization with an interest in this article.