Multi-Generational Cycles of Poverty and Prosperity

Abstract

This thesis researches racial economic disparities over time and the historical factors that have allowed such starkly visible differences to persist for multiple generations. It also controls for routine rationalizations for these economic disparities--education and income levels--to dispel them as explanations. A more definite determinant of economic disparities in America is that of inherited wealth. When separating inherited wealth from non-inherited wealth, the racial wealth gap disappears. This is evidence that most wealth in America is not self-made, but passed down from generation to generation, making social mobility--moving past the economic state in which one was born--much more difficult than commonly perceived. Much of the current wealth being inherited in America today was accumulated in the mid-20th Century time of economic prosperity during and following World War II; however, this time period also coincided with educational and employment segregation that forced African Americans into second class citizenship, leaving them out of much of the opportunities to accumulate wealth. Only a generation or two removed from segregation, African Americans are still climbing an uphill battle when it comes to closing income and asset disparities despite political and social gains in the last few decades.