Family Poverty in Black and White: Results From a New Poverty Measure

Abstract

Advances in poverty measurement have opened new opportunities for investigating differences in poverty among racial and ethnic groups. Some researchers have attributed differences in poverty to differences in group characteristics, such as marital status or educational attainment, whereas others have focused on labor market differences or to differential benefits from taxes and transfer payments. This paper brings together all of these approaches to investigate the history of Black–White poverty differentials for families with children from 1980 to 2014. We break the history of the Black–White poverty differential into three “eras”: 1980 to 1992, when the racial differential was largely driven by the business cycle; 1992 to 2002, when the racial differential was reduced substantially; and 2002 to 2014, when the differential could have been strongly influenced by the Great Recession, but was not. For each era, we examine the extent to which the changes in the poverty differential were influenced by changes in tax and transfer payment policy and by changes in family demographic and labor market characteristics. We find that labor market changes and changes in tax credits and transfer payments have strongly influenced the differential, though racial differences in marital structure, family work effort, and heads’ educational attainment also continue to play a role.