We study the sources of racial disparities in income using anonymized longitudinal data covering nearly the entire U.S. population from 1989 to 2015. We document three results. First, black Americans and American Indians have much lower rates of upward mobility and higher rates of downward mobility than whites, leading to persistent disparities across generations. Conditional on parent income, the black-white income gap is driven by differences in wages and employment rates between black and white men; there are no such differences between black and white women. Hispanic Americans have rates of intergenerational mobility more similar to whites than blacks, leading the Hispanic-white income gap to shrink across generations. Second, differences in parental marital status, education, and wealth explain little of the black-white income gap conditional on parent income. Third, the black-white gap persists even among boys who grow up in the same neighborhood. Controlling for parental income, black boys have lower incomes in adulthood than white boys in 99% of Census tracts. The few areas with small black-white gaps tend to be low-poverty neighborhoods with low levels of racial bias among whites and high rates of father presence among blacks. Black males who move to such neighborhoods earlier in childhood have significantly better outcomes. However, less than 5% of black children grow up in such areas. Our findings suggest that reducing the black-white income gap will require efforts whose impacts cross neighborhood and class lines and increase upward mobility specifically for black men.

We construct a publicly available atlas of children's outcomes in adulthood by Census tract using anonymized longitudinal data covering nearly the entire U.S. population. For each tract, we estimate children's earnings distributions, incarceration rates, and other outcomes in adulthood by parental income, race, and gender. These estimates allow us to trace the roots of outcomes such as poverty and incarceration back to the neighborhoods in which children grew up. We find that children's outcomes vary sharply across nearby areas: for children of parents at the 25th percentile of the income distribution, the standard deviation of mean household income at age 35 is $5,000 across tracts within counties. We illustrate how these tract-level data can provide insight into how neighborhoods shape the development of human capital and support local economic policy using two applications. First, the estimates permit precise targeting of policies to improve economic opportunity by uncovering specific neighborhoods where certain subgroups of children grow up to have poor outcomes. Neighborhoods matter at a very granular level: conditional on characteristics such as poverty rates in a child's own Census tract, characteristics of tracts that are one mile away have little predictive power for a child's outcomes. Our historical estimates are informative predictors of outcomes even for children growing up today because neighborhood conditions are relatively stable over time. Second, we show that the observational estimates are highly predictive of neighborhoods' causal effects, based on a comparison to data from the Moving to Opportunity experiment and a quasi-experimental research design analyzing movers' outcomes. We then identify high-opportunity neighborhoods that are affordable to lowincome families, providing an input into the design of affordable housing policies. Our measures of children's long-term outcomes are only weakly correlated with traditional proxies for local economic success such as rates of job growth, showing that the conditions that create greater upward mobility are not necessarily the same as those that lead to productive labor markets.

We study the sources of racial disparities in income using anonymized longitudinal data covering nearly the entire U.S. population from 1989-2015. We document three results. First, black Americans and American Indians have much lower rates of upward mobility and higher rates of downward mobility than whites, leading to persistent disparities across generations. Conditional on parent income, the black-white income gap is driven by differences in wages and employment rates between black and white men; there are no such differences between black and white women. Hispanic Americans have rates of intergenerational mobility more similar to whites than blacks, leading the Hispanic-white income gap to shrink across generations. Second, differences in parental marital status, education, and wealth explain little of the black-white income gap conditional on parent income. Third, the black-white gap persists even among boys who grow up in the same neighborhood. Controlling for parental income, black boys have lower incomes in adulthood than white boys in 99% of Census tracts. The few areas with small black-white gaps tend to be low-poverty neighborhoods with low levels of racial bias among whites and high rates of father presence among blacks. Black males who move to such neighborhoods earlier in childhood have significantly better outcomes. However, fewer than 5% of black children grow up in such areas. Our findings suggest that reducing the black-white income gap will require efforts whose impacts cross neighborhood and class lines and increase upward mobility specifically for black men.

Race and ethnicity responses can change over time and across contexts – a component of population change not usually considered in studies that use race and ethnicity as variables. To facilitate incorporation of this aspect of population change, we show patterns and directions of individual-level race and Hispanic response change throughout the U.S. and among all federally recognized race/ethnic groups. We use internal Census Bureau data from the 2000 and 2010 censuses in which responses have been linked at the individual level (N = 162 million). About 9.8 million people (6.1 percent) in our data have a different race and/or Hispanic origin response in 2010 than they did in 2000. Race response change was especially common among those reported as American Indian, Alaska Native, Native Hawaiian, Other Pacific Islander, in a multiple-race response group, or Hispanic. People reported as non-Hispanic white, black, or Asian in 2000 usually had the same response in 2010 (3%, 6% and 9% of responses changed, respectively). Hispanic/non-Hispanic ethnicity responses were also usually consistent (13% and 1% changed). There were a variety of response change patterns, which we detail. In many race/Hispanic response groups, there is population churn in the form of large countervailing flows of response changes that are hidden in cross-sectional data. We find that response changes happen across ages, sexes, regions, and response modes, with interesting variation across race/ethnic categories. Researchers should think through and discuss the implications of race and Hispanic origin response change when designing analyses and interpreting results.

Students in the United States whose household income is less than 130% of the poverty line qualify for free lunch, and students whose household income is between 130% and 185% of the poverty line qualify for reduced-price lunch. Education researchers and policymakers often use free and reduced-price lunch (FRPL) status to measure socioeconomic disadvantage. But how valid is this measure? Linking IRS income tax data to school administrative records for all eighth graders in one California public school district and Oregon public schools, we examine how well FRPL enrollment captures student disadvantage. We find that FRPL categories capture relatively little variation in household income. However, FRPL captures elements of educational disadvantage that IRS-reported household income data do not.