The Black-White Happiness Gap: Large, but Narrowing

By Justin Wolfers in the New York Times 

There’s a lot of talk about race these days.  But high-frequency chatter can obscure some of the more important longer-term trends shaping the lives of African-Americans.  Which is why Betsey Stevenson and I turn to the data, in a new paper, “Subjective and Objective Indicators of Racial Happiness.”  The full version is here, but David Leonhardt does a splendid job of writing up the paper in today’s New York Times (plus don’t miss the great graphic).

The big idea in the paper is to see what we can learn from subjective indicators—like happiness—that isn’t evident in objective indicators.

The usual objective indicators suggest that there’s been disappointingly little progress in narrowing racial gaps in employment or income since the 1970s.  And objective social indicators like educational attainment, incarceration rates or some measures of family structure tell an even grimmer story.  Basically, the Civil Rights movement happened, and then we ran out of puff about three or four decades ago.  It’s a thoroughly dispiriting set of facts, and according to the “taxi driver test” (i.e. talking with cabbies), this lack of progress isn’t widely understood.

But data on self-reported happiness add some nuance to this story.  Our research reveals three key findings:

1. The black-white happiness gap in the 1970s was huge.  And as much as we know that measures of relative deprivation pointed to tough circumstances for blacks in the 1970s, the happiness gap was larger—much larger—than could be explained by these objective differences in circumstances.  Even the richest blacks were less happy than the poorest whites.  Here’s Leonhardt’s summary of this evidence:
   
   

   In the 1970s, a relatively affluent black person — one in a household making more than nine out of 10 other black households, or at the 90th percentile of the black income spectrum — was earning the same amount as someone at the 75th percentile of the white spectrum. That’s another way of saying blacks were making less than whites.

   But blacks were far less satisfied with their lives than could be explained by the income difference. People at the 90th percentile of the black income spectrum were as happy on average as people just below the 10th percentile of the white income spectrum, amazingly enough.

2. The black-white happiness gap has narrowed substantially.  Again, here’s Leonhardt:
   
   

   Today, people at the 90th percentile of the black income spectrum are still making about as much as those at the 75th percentile of the white spectrum — but are now as happy on average as people in the dead middle, or the 50th percentile, of the white income spectrum. The income gap hasn’t shrunk much, but the happiness gap has.”

   In fact, the rise in the happiness of black Americans is as dramatic of a rise in happiness as you are likely to see in this sort of data.  This has occurred despite very little progress in the usual objective indicators.
3. Even as the black-white happiness gap has narrowed by about two-fifths, it remains large.  Much of this remaining gap can be “explained”—in a statistical sense—by the different life circumstances of blacks and whites. So today, the objective and subjective indicators tell a more consistent story.

What’s driving these dramatic changes in happiness?  Well, we don’t know exactly what the reason is, but:

The most obvious is the decrease — though certainly not the elimination — in day-to-day racism. “The decline in prejudice has been astounding,” says Kerwin Charles, a University of Chicago economist who has studied discrimination. Well into the 1970s, blacks faced “a vast array of personal indignities that led to unhappiness,” he noted. Today, those indignities are unacceptable in many areas of American life.

I think Kerwin is right, although this is based on gut, rather than firm evidence.  And so the next stage in this research program is to link those personal indignities to measures of well-being.  The social science challenge here is a measurement one: How best to get a handle on the evolution of day-to-day racism?

For more on this, also see Julia Baird’s splendid Newsweek column, which emphasizes the gender dimension of our research.

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Justin Wolfers is a professor of economics at the University of Pennsylvania.