It’s 1880. The Civil War ended 15 years ago. Three years ago, federal troops withdrew from the South. Now, children of black and white workers of similar economic standing are able to climb up the economic ladder at the same pace. So by the start of the next decade, the median black worker earns more than around 30 percent of the nation’s labor force.
Of course, that scenario isn’t real. It’s a counterfactual from a new working paper published in the National Bureau for Economic Research, by historian William J. Collins and economist Marianne H. Wanamaker. In reality, black workers reached that 30th percentile milestone a full 100 years later, in 2000.
In the paper, Collins and Wanamaker set out to understand the mechanisms that drive a wedge between the incomes of blacks and whites from one generation to the next. Their big finding is this: Between 1880 and 2010, whites showed much higher rates of upward mobility than blacks—even if their parents started from the same economic position. “There is a specific penalty for black people, which is independent of whatever income their fathers earn,” Wanamaker tells CityLab. “And that has been constant over 100 years.” [....]
According to the researchers, the parents’ education and location mattered, but did not fully explain the divergent mobility of their children. What did have some bearing was the differences in“human capital”—the skills and knowledge that a worker contributes in the labor market. But the source of that disparity leads us back to square one.
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