In all countries, but more intensely in South Africa, African descents are more likely than whites to be confined to the bottom of the income distribution, which is reflected in higher relative poverty rates, especially in the US, and lower average income than whites, with a larger gap in South Africa and Brazil. The differentials in income are increasing in absolute terms along the income scale in all three countries, while the pattern of gaps as a percentage of the income of whites varies across countries: it is roughly flat in South Africa, increasing in Brazil, and decreasing in the US.
Using an Oaxaca-Blinder approach, we have analyzed the racial gap in average equivalized household income in these countries. Around a half of this differential can be explained by the observed characteristics in the US and Brazil, with demographic factors appearing more relevant in the US, especially the type of household and the number of children, and the large educational gap being the most single factor explaining Brazilian racial inequality. The performance of households members in the labor market are important in the US but not in Brazil, especially due to the lower employment rates of young unskilled black males in the former country. The contrary occurs with geographical area of residence, which is important in Brazil, but not in the US. South Africa turns out to have the largest absolute gaps explained by all characteristics. The relative contribution of educational gap between blacks and whites appears to be the main explanatory factor in South Africa. Despite that, characteristics jointly explain less than a quarter of the differential in incomes, the lowest among all countries. Even if blacks had the same observed characteristics as whites in these three countries, a substantial (conditional) differential would still persist in average incomes.
The distributional DFL analysis shows that in general observed characteristics in all three countries explain better why there are relatively more poor people and less rich among blacks, than why the black middle class is so weak. It further shows that in all countries, but especially in Brazil, education becomes increasingly important to explain the racial income differentials at higher incomes, while other factors like geography in Brazil or labor participation in the US are relatively more important to explain differentials at the bottom of the distribution, and so the racial poverty gap.