Shifts in Childhood Environment Shrink “Race Gaps,” Widen “Class Gaps”

Consistent with prior research, the 1978 birth cohort shows marked disparities between Black and White children born to both low-income parents (the 25th percentile of the income distribution or an annual household income of about $26,000) and high-income parents (the 75th percentile of the income distribution or an annual household income of about $95,000).

On average, Black children born to low-income parents in the 1978 birth cohort went on to earn $12,994 less per year than their White counterparts. But for the 1992 birth cohort, the earnings gap, while still substantial, had shrunk by nearly a third to $9,521.

This shrinking race gap was due to both improvements in mobility for low-income Black children and declines in earnings for low-income White children.

At a national level, the research found little change in earnings outcomes for other race and ethnicity groups (Asian, American Indian or Alaska Native and Hispanic) across this time period.

In contrast, White children born to high-income parents in the 1978 cohort went on to earn $10,383 more than their low-income White counterparts. But for the 1992 cohort, the White “class gap” had increased by nearly a third to $13,202.

This growing class gap was due to both declining mobility for White children from low-income households and improvements in mobility of White children from high-income households.

There was little change in the class gap for Black children during this time because Black children born to high- and low-income parents experienced comparable improvements in earnings.

In addition to earnings, similar patterns of growing class gaps and shrinking race gaps were found across a broad range of outcomes, such as educational attainment, standardized test scores, marriage rates, and mortality which are described further in the new research.

The likelihood of growing up in a low-income household (defined here as the bottom fifth of the income distribution) and remaining low-income as an adult narrowed by nearly 75% between Black and White children born in 1978 and 1992, declining from an initial gap of 14.7 percentage points in 1978 to 4.1 percentage points by 1992.

This narrowing gap is attributable to both a 6-percentage point decrease in poverty persistence among Black children and a 5-percentage point increase in poverty persistence among White children.

The likelihood of a Black or White child born to a low-income family reaching the top of the income distribution as a young adult remained the same between 1978 and 1992. However, White children born in 1992 were still 8.9 percentage points more likely to reach that level than their Black counterparts.

To better understand these changes nationally, this study also looks at trends by county. While Black-White race gaps shrunk and White class gaps expanded in nearly every part of the country, the magnitude of these changes varied substantially across regions.

For White children from low-income families, economic mobility declined most in U.S. areas like the Great Plains and parts of the coasts that previously enjoyed relatively high mobility.

Outcomes for White children from low-income families remained stable in parts of the country like the Southeast and industrial Midwest where mobility was already relatively low.

For Black children from low-income families, mobility increased sharply in the Southeast and the industrial Midwest, with modest changes on the coasts.

Although mobility improved for Black children, significant earnings disparities between Black and White Americans persisted. This is because of the substantial initial gap between Black and White Americans in the 1978 birth cohort. The maps, which employ distinct and nonoverlapping color scales, demonstrate variations in mobility outcomes between these two groups.

The research shows that children’s outcomes are closely related to changes impacting the parents in their neighborhood and particularly parents of the same race and class. The research refers to these changes as shifts in “community conditions.”

For example, the research found pronounced drops in mobility for low-income White individuals in communities where parental employment rates declined among low-income White parents.

Conversely, mobility improved for low-income Black individuals where employment rates for low-income Black parents increased.

While prior sociological research has highlighted employment as a powerful proxy for community conditions, we find similar patterns among other community conditions like marriage rates.   

Ninety percent of income mobility gaps by race and class can be explained by changes in community conditions.

This research finds that the relationship between mobility and parent employment rates is a result of changes in childhood environment.

Social interactions, as opposed to changes in economic resources, have a greater impact on children’s outcomes. The research also demonstrates how children are most sensitive to changes in community conditions related to the parents of the kids they are most likely to be friends with based on age, race and class.

Economic mobility can change within relatively short periods of time.

While previous research suggested the importance of targeting policy interventions at the neighborhood level, this study further identifies patterns of change at the community level as shaped by not only neighborhood, but by race, class and cohort.

These findings provide new data to understand how and where places are changing over time that may be used to inform policy focused on improving economic mobility.

This research includes new publicly available data on changes in mobility by county, birth cohort, race, class and sex, as well as a new interactive module within the Opportunity Atlas that allows you to explore mobility trends in your county.