The Black-White Test Score Gap: Lessons from the Panel Study of Income Dynamics

Wei-Jun Jean Yeung, New York University
Kathryn M. Pfeiffer, New York University

Based on two waves of panel data for three age cohorts of children from the PSID-Child Development Supplements, we find large black-white test score differences among children of all ages. Even before children start formal schooling, black children score .8 and .5 of a standard deviation lower than whites in Applied Problem and Letter-Word tests respectively. All achievement gaps before grade three can be accounted for when we control for the child’s characteristics, home environment (both structural and cultural factors), and mother’s cognitive skills. As children advance to higher grades, there is a diminishing role of these covariates in explaining the achievement gap. In high school years, the gaps remain a statistically significant .5 and .65 of a standard deviation for Applied Problem and Letter-Word scores respectively after all the covariates are controlled for (representing 63% and 88% of the raw test score gap).