Parental Job Loss and Children's Educational Attainment in Black and White Middle-Class Families

Objectives We aim to understand why blacks are significantly less likely than whites to perpetuate their middle-class status across generations. To do so, we focus on the potentially different associations between parental job loss and youth's educational attainment in black and white middle-class families. Methods We use data from the Panel Study of Income Dynamics (PSID), following those children "born" into the survey between 1968 and 1979 and followed through age 21. We conduct multivariate regression analyses to test the association between parental job loss during childhood and youth's educational attainment by age 21. Results We find that parental job loss is associated with a lesser likelihood of obtaining any postsecondary education for all offspring, but that the association for blacks is almost three times as strong. A substantial share of the differential impact of job loss on black and white middle-class youth is explained by race differences in household wealth, long-run measures of family income, and, especially, parental experience of long-term unemployment. Conclusions These findings highlight the fragile economic foundation of the black middle class and suggest that intergenerational persistence of class status in this population may be highly dependent on the avoidance of common economic shocks.