Key Points

• This report examines racial disparities in income mobility across three generations by drawing on data from the Panel Study of Income Dynamics.
• More than half a century since the civil rights victories of the 1960s, racial gaps in poverty and opportunity remain a cause for national shame.
• Three-generation poverty occurs among one in 100 Whites but describes the experience of one in five Black adults. Black adults in their 30s are over 16 times more likely than Whites are to have had both a parent and grandparent in poverty (defined as the bottom fifth of the income distribution).
• Blacks are 41 percent more likely to be in third-generation poverty than Whites are to be poor.

Executive Summary

Issues of racial inequality and injustice are center stage in America today—especially the position and treatment of Black Americans. This report presents evidence on long-term differences in opportunity by race. Previous research showed large racial gaps in poverty and mobility across two generations. We take a longer view, examining patterns of multigenerational poverty for Black and White Americans across three generations, drawing on data from the Panel Study of Income Dynamics.

We find that Black families are over 16 times more likely than White families are to experience three generations of poverty (defined as the bottom fifth of the income distribution). Three-generation poverty occurs among one in 100 Whites, but it describes the experience of one in five Black adults. Black Americans are 41 percent more likely to be in third-generation poverty than White adults are to be poor. The grandparents of Black adults had much lower incomes than the grandparents of their White counterparts had; this initial inequality has been compounded by lower rates of subsequent Black upward mobility out of poverty and by greater Black downward mobility.

These patterns mean that poor Black and White adults today have dramatically different family poverty trajectories. Half of Blacks in the bottom fifth of the income distribution have parents and grandparents who were also poor, compared to just 8 percent of poor Whites. We show that the longer the time frame, the starker the racial gaps. More than half a century since the civil rights victories of the 1960s, these racial gaps in poverty and opportunity remain a cause for national shame.

Introduction

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, educational opportunity, social capital inequalities, and the racial wealth gap.

In this report, we take a long view of economic inequality by race, showing the persistence of unequal opportunity for Black Americans across multiple generations. Recent research has highlighted stark disparities in mobility over two generations between Black and White Americans.¹ However, owing to data inadequacies, we know relatively little about Black-White gaps in mobility and poverty across three or more generations.

We address this gap in the literature by examining poverty (defined here as being in the bottom fifth of the family income distribution) across three generations in the United States using the Panel Study of Income Dynamics (PSID).² We find large Black-White gaps: Black Americans are over 16 times more likely to be in the third generation of poverty than non-Hispanic White Americans are.³ We show that 21.3 percent of Black Americans are experiencing third generation poverty today, compared to only 1.2 percent of Whites. Blacks are 41 percent more likely to be in third-generation poverty than Whites are to be poor. Half of poor Blacks today had a poor parent and grandparent, while just 8 percent of poor Whites did.