The Effects of Childhood Poverty on Racial Differences in Economic Opportunity in Young Adulthood
Zachary Parolin1, Christopher Wimer1, Jane Waldfogel1
1Columbia University
Young Black adults in the U.S. are more likely than young white adults to live in poverty. Prior research has attributed these disparities to differential attainment of “benchmarks” related to education, employment, and family formation. In contrast, we use the PSID to investigate how racial differences in childhood poverty shape racial differences in young adult poverty. Indirectly, childhood poverty affects young adult poverty through its negative association with the attainment of the young adult benchmarks. Directly, each additional year of childhood poverty increases the likelihood that a young adult lives in poverty, independent of the benchmarks. Black children experience poverty at three times the rate as white children, and that the effect of childhood poverty on young adult poverty is greater for Black individuals. In turn, racial differences in childhood poverty are more consequential than differences in education, employment, and family formation in shaping racial differences in young adult poverty.