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October 15, 2015

Economist says we need to address upward mobility gap

We need to do more about the large upward mobility gap between blacks and whites, according to a senior economist at the Federal Reserve Bank of Chicago.

Bhashkar Mazumder

Bhashkar Mazumder

Bhashkar Mazumder spoke Oct. 8 in the second fall Buchanan, Ingersoll & Rooney lecture in the School of Social Work’s Center on Race and Social Problems.

Mazumder studies labor economics, education and health, including intergenerational economic mobility and the long-term effects of poor health on children’s early lives. “A fundamental issue that we ought to pay attention to,” he said, is the idea that President Barack Obama highlighted in a 2013 speech: “‘… a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead.’”

Although extreme upward mobility between a parent and a child’s generation — the American rags-to-riches dream — is statistically a myth, with only 10 percent of whites and 4 percent of blacks born into the bottom fifth rising to the top fifth of American income today — mobility in general is less of a possibility for blacks than whites.

“Understanding the racial gaps in [school] achievement, in labor market success, is one of the fundamental questions this country is trying to grapple with,” particularly social scientists, he said. The Federal Reserve is interested in such data because they allow the bank to better undertake its dual mandate of maintaining stable employment numbers and stable prices.

Mazumder’s research has tracked both upward and downward mobility and concluded that blacks are subject to a double disadvantage: Across generations, they move less frequently upward and more frequently downward than whites. Among people whose parents are in the bottom fifth of income, 75 percent of white kids move up to a higher fifth in a single generation while only 48 percent of black kids move up. Even measuring those who simply move up from the bottom half to the top half of the income scale shows the same 27-point difference between black and white mobility.

Downward mobility shows a similar gap. In one generation, more than 60 percent of black kids fall from the top half of the income scale, despite being born into that position, whereas fewer than 40 percent of white kids sink below the middle mark in income.

“The gaps didn’t come from nowhere,” Mazumder noted. “There was slavery and there was segregation after that.

“How many generations does it take” to get past these and other causes? he asked.

One figure wasn’t really being talked about, Mazumder added: “How many generations would it take for affirmative action to have its effect?” His findings hint that it will take longer than the 25 years then-Supreme Court Justice Sandra Day O’Connor posited in upholding race-based choices in college admissions in a 2003 case against the University of Michigan. “… the Court expects that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today,” she wrote.

Shrinking the size of earlier gaps took decades and sometimes more than one generation, Mazumder explained.

Southern-born U.S. blacks between 1865 and 1914 on average had three fewer years of schooling than whites, but this shrank between 1914 and 1950, thanks in large part to a mass black school building program undertaken by Julius Rosenwald, president of Sears, Roebuck and Co., between 1910 and 1932. Mazumder lamented the lack of any similar educational improvement efforts today.

Along these same lines, he pointed out, health in a child’s early life affects all of his or her life. The difference between Southern blacks’ and whites’ childhood mortality rates at ages one month to 1 year was narrowed, Mazumder said, when the 1960s civil rights movement helped desegregate hospitals in the South, which “improved the potential for learning later in life” as well. “This had a dramatic effect in rapidly narrowing the black-white test score gap” when these Southern children reached high school.


What factors most affect black-white mobility differences today? Overall, Mazumder said, the more concrete factors of schooling opportunities and childhood health still are most crucial. Psychological factors being studied today, such as self-esteem and the feeling that a child is in charge of his or her own life, are less influential for intergenerational economic mobility, he said.

In fact, the gap between black and white mobility even closes for those whose father had a higher education — college and beyond college. Intact family structure — living with both parents instead of just one parent — makes a 7-8 percent improvement for blacks in upward mobility, but makes mobility slightly worse for whites, although Mazumder suspects the latter is just “noise” in the data, he said.

“I’m fairly convinced that parental stress and trauma … are things that definitely influence parental behavior” and can have an effect on economic mobility of their children, he said. “But it’s tougher to get at those linkages.” He’s also looking now at the effect on mobility of redlining — the practice by banks and mortgage lenders, through at least the 1970s, of keeping blacks from getting loans for homes in certain white neighborhoods — and of individuals’ credit scores.

“The recent patterns are pretty troubling,” he concluded. “We’re not going to get to greater convergence” in the gap in black-white mobility if other gaps between blacks and white aren’t narrowed.

“Countries with greater inequality tend to have less mobility, including the U.S.,” he said. “We both have inequality and persistence in that inequality.”

—Marty Levine   

Filed under: Feature,Volume 48 Issue 4

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