Racial Disparities and the New Federalism

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Abstract

The paper explores how shifts in both social welfare policies and economic conditions beginning in the mid-1990s altered the relative well-being of blacks— compared to whites—between 1997 and 2002. It uses the National Survey of America's Families (NSAF) to assess how the relative well-being of black families improved or disparities persisted. The findings suggest that some of the disparities between whites and blacks narrowed between 1997 and 2002, especially among people with low incomes. But gaps in income, child school outcomes, employment, assets, and welfare and other income supports, remained essentially unchanged over the period.

Introduction

Historically, African American families have experienced much lower levels of economic wellbeing than white Americans across a wide range of indicators. They are less likely to be working and more likely to receive public assistance, and they earn lower incomes on average and suffer from higher rates of poverty. Beginning in the mid-1990s, dramatic shifts in both social welfare policies and economic conditions changed the landscape of opportunity for low-income families in the United States. During this period, the federal government shifted more responsibility for social welfare programs to the states, and most of the nation experienced unprecedented economic growth and then decline.

This paper explores how these changes altered the relative well-being of blacks—compared to whites—between 1997 and 2002. It uses data from the National Survey of America’s Families (NSAF), a unique, cross-sectional survey of welfare program participation and economic and social well-being, to assess how the relative well-being of black families improved or disparities persisted. More specifically, this paper presents new analysis of NSAF data to explore changes in disparities between blacks and whites in the United States across policy domains. Given the severity and persistence of racial inequality in the United States, it makes sense to explore how welfare reform—broadly defined—has either narrowed or widened racial gaps. In addition, to understand both the persistence and the implications of racial disparities, this analysis spans conventional topical boundaries, since disadvantages in one area—such as education—can undermine outcomes in others—such as employment and earnings.

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The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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