Measuring the Economic Racial Divide Across the Course of American Lives

This article examines the racial divide in America with respect to three key aspects of economic well-being across the life course: (1) the likelihood of attaining affluence and avoiding poverty; (2) the probability of owning a home and acquiring significant levels of financial equity; and (3) the likelihood of possessing enough assets to protect oneself through a spell of economic turmoil. The Panel Study of Income Dynamics data set is used to construct a series of life tables that provide adulthood estimates into the occurrence of these events. The results indicate that within each area, the economic racial divide across the American life course is immense. Blacks are many times more likely than whites to experience poverty while never achieving affluence, less likely to purchase a home at an early age and build up significant levels of home equity, and more likely to experience asset poverty across the stages of the life course. The concept of cumulative advantage/disadvantage is discussed as a way of understanding the widening effect of race upon the economic trajectories of whites and blacks across the American life course.