This paper asks whether black and white families have experienced different levels of intergenerational economic mobility in the United States. And why white American families are economically better-off than non-white American families. Using a nationally representative sample of 5,221 black and white families from the Panel Study of income Dynamics, observed from 1967 to 1996. it is shown that black children experienced less upward mobility from the bottom, and more downward mobility from the top, than white children whose parents had comparable incomes. This mobility gap was significant at all levels of parental income and was largest in the upper quantiles of the income distribution. By way of illustration, 43% of white children born to the top quartile remained in this quartile as adults: for blacks the figure was 9%. A method is outline for analyzing mobility in the presence of heterogeneity by group and non-linearity in the relation between parent and child incomes. It is commonly assumed that lighter skinned African Americans receive preferential treatment over darker skinned counterparts. Using individual data from three sources, this paper examines the influence of skin tone on education and on wages. Lighter skin tone has a consistent positive impact on educational attainment but generally does not influence wages. Possible mechanisms by which skin tone differences might influence economic outcomes are investigated, including measurement error, perceived attractiveness, access to integrated schools or work groups, perceived discrimination, and genetic differences. The perception that there is differential treatment on the basis of skin tone is more pronounced than the observed disparities. One way to understand the condition under which people develop and act on a sense of unfairness is to clarify the conditions in which they do not do so." The conditions may not be mirror images, of course--there may be an intermediate zone of confusion, or the two...