The Inheritance of Race Revisited: Childhood Wealth and Income and Black–White Disadvantages in Adult Life Chances

David Brady, Ryan Finnigan, Ulrich Kohler and Joscha Legewie

EconStor Open Access Articles and Book Chapters, 2020, vol. 7, 599-627

Abstract: Vast racial inequalities continue to prevail across the United States and are closely linked to economic resources. One particularly prominent argument contends that childhood wealth accounts for black–white (BW) disadvantages in life chances. This article analyzes how much childhood wealth and childhood income mediate BW disadvantages in adult life chances with Panel Study of Income Dynamics and Cross-National Equivalent File data on children from the 1980s and 1990s who were 30+ years old in 2015. Compared with previous research, we exploit longer panel data, more comprehensively assess adult life chances with 18 outcomes, and measure income and wealth more rigorously. We find large BW disadvantages in most outcomes. Childhood wealth and income mediate a substantial share of most BW disadvantages, although there are several significant BW disadvantages even after adjusting for childhood wealth and income. The evidence mostly contradicts the prominent claim that childhood wealth is more important than childhood income. Indeed, the analyses mostly show that childhood income explains more of BW disadvantages and has larger standardized coefficients than childhood wealth. We also show how limitations in prior wealth research explain why our conclusions differ. Replication with the National Longitudinal Survey of Youth and a variety of robustness checks support these conclusions.

Keywords: racial inequality; wealth; income; intergenerational mobility; stratification; inequality (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:240903

DOI: 10.15195/v7.a25

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