IDEAS home Printed from https://ideas.repec.org/a/spr/demogr/v56y2019i3d10.1007_s13524-019-00773-7.html
   My bibliography  Save this article

Race Matters: Income Shares, Income Inequality, and Income Mobility for All U.S. Races

Author

Listed:
  • Randall Akee

    (Brookings Institution
    UCLA
    National Bureau of Economic Research)

  • Maggie R. Jones

    (U.S. Census Bureau, Center for Economic Studies)

  • Sonya R. Porter

    (U.S. Census Bureau, Center for Economic Studies)

Abstract

Using unique linked data, we examine income inequality and mobility across racial and ethnic groups in the United States. Our data encompass the universe of income tax filers in the United States for the period 2000–2014, matched with individual-level race and ethnicity information from multiple censuses and American Community Survey data. We document both income inequality and mobility trends over the period. We find significant stratification in terms of average incomes by racial/ethnic group and distinct differences in within-group income inequality. The groups with the highest incomes—whites and Asians—also have the highest levels of within-group inequality and the lowest levels of within-group mobility. The reverse is true for the lowest-income groups: blacks, American Indians, and Hispanics have lower within-group inequality and immobility. On the other hand, low-income groups are also highly immobile in terms of overall, rather than within-group, mobility. These same groups also have a higher probability of experiencing downward mobility compared with whites and Asians. We also find that within-group income inequality increased for all groups between 2000 and 2014, and the increase was especially large for whites. The picture that emerges from our analysis is of a rigid income structure, with mainly whites and Asians positioned at the top and blacks, American Indians, and Hispanics confined to the bottom.

Suggested Citation

  • Randall Akee & Maggie R. Jones & Sonya R. Porter, 2019. "Race Matters: Income Shares, Income Inequality, and Income Mobility for All U.S. Races," Demography, Springer;Population Association of America (PAA), vol. 56(3), pages 999-1021, June.
  • Handle: RePEc:spr:demogr:v:56:y:2019:i:3:d:10.1007_s13524-019-00773-7
    DOI: 10.1007/s13524-019-00773-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13524-019-00773-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s13524-019-00773-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jason DeBacker & Bradley Heim & Vasia Panousi & Shanthi Ramnath & Ivan Vidangos, 2013. "Rising Inequality: Transitory or Persistent? New Evidence from a Panel of U.S. Tax Returns," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 67-142.
    2. Matlack, Janna L. & Vigdor, Jacob L., 2008. "Do rising tides lift all prices? Income inequality and housing affordability," Journal of Housing Economics, Elsevier, vol. 17(3), pages 212-224, September.
    3. William J. Collins & Robert A. Margo, 2011. "Race and Home Ownership from the Civil War to the Present," NBER Working Papers 16665, National Bureau of Economic Research, Inc.
    4. Bruce D. Meyer & Nikolas Mittag, 2015. "Using Linked Survey and Administrative Data to Better Measure Income: Implications for Poverty, Program Effectiveness and Holes in the Safety Net," Upjohn Working Papers 15-242, W.E. Upjohn Institute for Employment Research.
    5. Vivekinan Ashok & Ilyana Kuziemko & Ebonya Washington, 2015. "Support for Redistribution in an Age of Rising Inequality: New Stylized Facts and Some Tentative Explanations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 50(1 (Spring), pages 367-433.
    6. John Bound & Richard B. Freeman, 1992. "What Went Wrong? The Erosion of Relative Earnings and Employment Among Young Black Men in the 1980s," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 201-232.
    7. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    8. repec:eee:labchp:v:3:y:1999:i:pc:p:3143-3259 is not listed on IDEAS
    9. Fryer Jr., Roland G., 2011. "Racial Inequality in the 21st Century: The Declining Significance of Discrimination," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 10, pages 855-971, Elsevier.
    10. Melissa S. Kearney & Phillip B. Levine, 2016. "Income Inequality, Social Mobility, and the Decision to Drop Out of High School," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 333-396.
    11. Kawachi, I. & Kennedy, B.P. & Lochner, K. & Prothrow-Stith, D., 1997. "Social capital, income inequality, and mortality," American Journal of Public Health, American Public Health Association, vol. 87(9), pages 1491-1498.
    12. Dan Black & Amelia Haviland & Seth Sanders & Lowell Taylor, 2006. "Why Do Minority Men Earn Less? A Study of Wage Differentials among the Highly Educated," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 300-313, May.
    13. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-895, October.
    14. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    15. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
    16. Patrick Bayer & Kerwin Kofi Charles, 2016. "Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014," NBER Working Papers 22797, National Bureau of Economic Research, Inc.
    17. William J. Collins & Robert A. Margo, 2011. "Race and Home Ownership from the End of the Civil War to the Present," American Economic Review, American Economic Association, vol. 101(3), pages 355-359, May.
    18. Kennedy, Bruce P. & Kawachi, Ichiro & Prothrow-Stith, Deborah & Lochner, Kimberly & Gupta, Vanita, 1998. "Social capital, income inequality, and firearm violent crime," Social Science & Medicine, Elsevier, vol. 47(1), pages 7-17, July.
    19. James M. Poterba & Daniel R. Feenberg, 2000. "The Income and Tax Share of Very High-Income Households, 1960-1995," American Economic Review, American Economic Association, vol. 90(2), pages 264-270, May.
    20. Brittany Bond & J. David Brown & Adela Luque & Amy O’Hara, 2014. "The Nature of the Bias When Studying Only Linkable Person Records: Evidence from the American Community Survey," CARRA Working Papers 2014-08, Center for Economic Studies, U.S. Census Bureau.
    21. Joseph A Ritter & Lowell J Taylor, 2011. "Racial Disparity in Unemployment," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 30-42, February.
    22. Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 1-34.
    23. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    24. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    25. Jason DeBacker & Bradley Heim & Vasia Panousi & Shanthi Ramnath & Ivan Vidangos, 2013. "Rising Inequality: Transitory or Persistent? New Evidence from a Panel of U.S. Tax Returns," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 67-142.
    26. Vivekinan Ashok & Ilyana Kuziemko & Ebonya Washington, 2015. "Support for Redistribution in an Age of Rising Inequality: New Stylized Facts and Some Tentative Explanations," NBER Working Papers 21529, National Bureau of Economic Research, Inc.
    27. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    28. Komlos, John & Kelly, Inas (ed.), 2016. "The Oxford Handbook of Economics and Human Biology," OUP Catalogue, Oxford University Press, number 9780199389292.
    29. Carruthers, Celeste K. & Wanamaker, Marianne H., 2017. "Returns to school resources in the Jim Crow South," Explorations in Economic History, Elsevier, vol. 64(C), pages 104-110.
    30. Bollinger, Christopher R. & Hirsch, Barry & Hokayem, Charles M. & Ziliak, James P., 2018. "Trouble in the Tails? What We Know about Earnings Nonresponse Thirty Years after Lillard, Smith, and Welch," IZA Discussion Papers 11710, Institute of Labor Economics (IZA).
    31. Ramraj, Chantel & Shahidi, Faraz Vahid & Darity, William & Kawachi, Ichiro & Zuberi, Daniyal & Siddiqi, Arjumand, 2016. "Equally inequitable? A cross-national comparative study of racial health inequalities in the United States and Canada," Social Science & Medicine, Elsevier, vol. 161(C), pages 19-26.
    32. Vivekinan Ashok & Ilyana Kuziemko & Ebonya Washington, 2015. "Support for Redistribution in an Age of Rising Inequality: New Stylized Facts and Some Tentative Explanations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 367-433.
    33. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2010. "Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 91-128.
    34. William A. Darity & Patrick L. Mason, 1998. "Evidence on Discrimination in Employment: Codes of Color, Codes of Gender," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 63-90, Spring.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Bayer & Kerwin Kofi Charles, 2016. "Divergent Paths: Structural Change, Economic Rank, and the Evolution of Black-White Earnings Differences, 1940-2014," NBER Working Papers 22797, National Bureau of Economic Research, Inc.
    2. Celeste K. Carruthers & Marianne H. Wanamaker, 2017. "Separate and Unequal in the Labor Market: Human Capital and the Jim Crow Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 35(3), pages 655-696.
    3. Romain Aeberhardt & Élise Coudin & Roland Rathelot, 2017. "The heterogeneity of ethnic employment gaps," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 307-337, January.
    4. Campos-Vazquez, Raymundo M. & Krozer, Alice & Ramírez-Álvarez, Aurora A. & de la Torre, Rodolfo & Velez-Grajales, Roberto, 2022. "Perceptions of inequality and social mobility in Mexico," World Development, Elsevier, vol. 151(C).
    5. Eric D. Gould, 2021. "Torn Apart? The Impact of Manufacturing Employment Decline on Black and White Americans," The Review of Economics and Statistics, MIT Press, vol. 103(4), pages 770-785, October.
    6. Sloczynski, Tymon, 2018. "Average Gaps and Oaxaca's Blinder Decompositions: A Cautionary Tale about Regression Estimates of Racial Differences in Labor Market Outcomes," IZA Discussion Papers 12041, Institute of Labor Economics (IZA).
    7. Randall Akee & Maggie R. Jones & Sonya R. Porter, 2017. "Racial Disparity in an Era of Increasing Income Inequality," CARRA Working Papers 2017-01, Center for Economic Studies, U.S. Census Bureau.
    8. Roy van der Weide & Ambar Narayan, 2019. "China and the United States: Different economic models but similarly low levels of socioeconomic mobility," WIDER Working Paper Series wp-2019-121, World Institute for Development Economic Research (UNU-WIDER).
    9. Winters, John V. & Hirsch, Barry, 2012. "An Anatomy of Racial and Ethnic Trends in Male Earnings," IZA Discussion Papers 6766, Institute of Labor Economics (IZA).
    10. Margo, Robert A., 2016. "Obama, Katrina, and the Persistence of Racial Inequality," The Journal of Economic History, Cambridge University Press, vol. 76(2), pages 301-341, June.
    11. Roland G. Fryer, Jr. & Devah Pager & Jörg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633-689.
    12. Barry T. Hirsch & John V. Winters, 2014. "An Anatomy Of Racial and Ethnic Trends in Male Earnings in the U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 930-947, December.
    13. Tomaz Cajner & Tyler Radler & David Ratner & Ivan Vidangos, 2017. "Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle," Finance and Economics Discussion Series 2017-071, Board of Governors of the Federal Reserve System (U.S.).
    14. Mahajan, Avichal, 2024. "Highways and segregation," Journal of Urban Economics, Elsevier, vol. 141(C).
    15. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    16. John S. Heywood & Daniel Parent, 2012. "Performance Pay and the White-Black Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 249-290.
    17. Judith K. Hellerstein & David Neumark, 2008. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 459-477, August.
    18. Ross Levine & Alexey Levkov & Yona Rubinstein, 2008. "Racial Discrimination and Competition," NBER Working Papers 14273, National Bureau of Economic Research, Inc.
    19. Alvarez-Cuadrado, Francisco & Japaridze, Irakli, 2017. "Trickle-down consumption, financial deregulation, inequality, and indebtedness," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 1-26.
    20. Windsteiger, Lisa, 2022. "The redistributive consequences of segregation and misperceptions," European Economic Review, Elsevier, vol. 144(C).

    More about this item

    Keywords

    Income inequality; Income shares; Income mobility; Race; Administrative data;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:demogr:v:56:y:2019:i:3:d:10.1007_s13524-019-00773-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.