The belief that if you work, you will be able to succeed has fallen in recent years, but a strong 70% majority still believes it is true.
Democrats have always been less likely to believe the American dream exists, with just 60% believing the above statement is true today compared to 88% of Republicans. Just 10 years ago, 68% of Democrats still believed in the American dream.
Democratic Party skepticism in the ability of hard work to benefit everyone has an unsurprising source: Democrats believe America is a fundamentally racist country and that it is this racism, not any difference in behavior within groups, that causes inequality in America. Republicans, meanwhile, are far less likely to say race is a major factor in someone’s success.
So, which party is right? A new working paper published by the National Bureau of Economic Research sheds some light.
Using microdata from the American Community Survey and the census, economists at Brown University and the University of Oxford analysed approximately 4 million U.S.-born individuals over 20 years between 1980 and 2000. Specifically, they examined inequality both within each ethnic group and between ethnic groups. Then they determined how much inequality there was within each group versus between each group. Researchers tracked ancestry past just the Asian, black, Hispanic, and white categories to English (8.77%), German (18.24%), Irish (11.52%), Italian (6.79%), Mexican (3.26%), and Mexican American (1.14%). About 10% of individuals in the dataset did not report their ancestry.
Breaking down inequality between “within-group” and “between-group,” researchers found that 96% of total income inequality could be attributed to “within-group” differences compared to just 4% between groups.
Explaining the importance of their findings, the authors write, “Inequality between ethnic groups could sow seeds of resentment, fragment the social fabric, and erode trust, fueling tensions, polarization, and conflict. Such a divide might marginalize segments of society, preventing their full engagement in the economic landscape and undermining efficiency, accumulation, and innovation. In contrast, inequality within ethnic groups often reflects disparities in access to education, credit markets, and other formative opportunities that shape individuals’ skills and life trajectories.”
The authors continue, “If inequality stems predominantly from gaps between ethnic groups, policies aimed at reducing intergroup disparities—affirmative action, targeted social programs, and anti-discrimination legislation—may be particularly suitable for narrowing inequality. Yet if inequality emerges primarily within ethnic groups, remedies may prove more effective when oriented toward the unequal distribution of resources and opportunities within communities.”
The message from the actual data is clear: Inequality in America is not caused by racism. It is caused by differences within groups, meaning that solutions to inequality based on group identity are destined to fail.
