Social networks affect the diffusion of information, and thus have the potential to reduce or amplify inequality in access to opportunity. We show empirically that social networks often exhibit a much larger potential for unequal diffusion across groups along paths of length 2 and 3 than expected by our random graph models. We argue that homophily alone cannot not fully explain the extent of unequal diffusion and attribute this mismatch to unequal distribution of cross-group links among the nodes. Based on this insight, we develop a variant of the stochastic block model that incorporates the heterogeneity in cross-group linking. The model provides an unbiased and consistent estimate of assortativity or homophily on paths of length 2 and provide a more accurate estimate along paths of length 3 than existing models. We characterize the null distribution of its log-likelihood ratio test and argue that the goodness of fit test is valid only when the network is dense. Based on our empirical observations and modeling results, we conclude that the impact of any departure from equal distribution of links to source nodes in the diffusion process is not limited to its first order effects as some nodes will have fewer direct links to the sources. More importantly, this unequal distribution will also lead to second order effects as the whole group will have fewer diffusion paths to the sources.