J Fam Econ Iss (2006) 27:588–600
DOI 10.1007/s10834-006-9034-7
ORIGINAL PAPER
Determinants of Income Differentials: Comparing
Asians with Whites and Blacks
Deanna L. Sharpe Æ Mohamed Abdel-Ghany
Published online: 13 September 2006
Ó Springer Science+Business Media, Inc. 2006
Abstract Census 2000 data are used to examine the determinants of income level
of six Asian groups as compared with whites, the majority group, and blacks, another
minority group. Results of descriptive and multivariate analysis lend support to both
human capital investment and structural barriers as explanation for income differentials among the various racial groups. All else equal, Asian Indians did not
have significantly different income levels as compared with white, whereas Chinese,
Filipinos, Korean and Vietnamese had significantly less household income than
whites and Japanese households had significantly more. All Asian groups had
significantly more household income than black households.
Keywords Asians Æ Income differentials
Introduction
In 2000, 3.6% of the United States population identified ‘‘Asian only,’’ as their race
(Reeves & Bennett, 2004). Although a small percentage of the total population,
Asian Americans and their economic status are of interest to family economists for
several reasons. First, Asian Americans constitute a fast growing minority group in
the United States. From 1980 to 1990, the Asian population in the United States
doubled in size (Lee, 1998). Over the subsequent decade, the Asian population in
the United States increased 48%, as compared with a 13% increase in the total
population of the United States over the same time frame (Barnes & Bennett, 2002).
D. L. Sharpe (&)
Personal Financial Planning Department, University of Missouri-Columbia, 239 Stanley Hall,
Columbia, MO 65211, USA
e-mail: sharped@missouri.edu
M. Abdel-Ghany
Consumer Sciences Department, University of Alabama, Box 870158, Tuscaloosa,
AL 35487-0158, USA
e-mail: mabdel-g@ches.ua.edu
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Second, Asian immigrants have long been held up as a ‘‘model minority’’ who use
diligence, investment in education and family solidarity to succeed. Recently,
however, scholars have criticized this view as not only incorrect but also harmful to
the economic success of Asian Americans (Le, 2005; Min, 1999). Some scholars
assert that emphasis on ‘‘model’’ qualities of Asian Americans has generated
resentment, motivating destructive attacks on Asian Americans and their businesses
by other minorities who are weary being compared with Asian Americans and
admonished to simply emulate their success (Asia Society, 2002; Kim, 2000; Min,
1999). There is also concern that policy makers who accept the ‘‘model minority’’
view will presume Asian Americans need no help from government policy or programs (Le, 2001; Min, 1999). Third, critics assert that describing Asian Americans
with averages masks bi-modal distributions of education, earnings, and poverty
levels among a heterogeneous population (Reeves & Bennett, 2003).
Until recently, the term ‘‘minority’’ in the United States connoted what one group
of sociologists dubbed ‘‘Two Nations: Black and White’’ (Kim, 1999). The cry for
civil rights among African Americans in the 1960s and their subsequent struggle for
racial equality focused much attention of media and scholars on these two racial
groups, generating an illusion of bipolar racial differences in the United States. In
this environment, Asian Americans were considered to be an overlooked minority.
Increased immigration of Asians and Latinos to the United States has spurred
sociologists to call for scholarship ‘‘beyond Black and White’’, that is, research that
considers the multiplicity of race within the United States and that evaluates the
socioeconomic status of a wide variety of racial groups (Kim, 1999).
This paper examines the income differentials among six specific groups of ‘‘Asian
only’’ United States residents: Asian Indian, Chinese, Filipino, Japanese, Korean,
and Vietnamese. The household income level of these six groups is compared with
the household income level of whites, as the majority race, and with blacks, as the
most acknowledged racial minority group in the United States. These six groups
were chosen because they are the largest subgroups among the ‘‘Asian only’’ population in the U.S.; taken together, they comprise 91% of that population.
Although respondents in each of these six groups marked Asian as their sole
racial identity, in reality, much diversity exists among Asian subgroups (Lien,
Conway, & Wong, 2003; Segal, Kilty, & Kim, 2002). Each Asian racial group has a
different history in the United States. The Chinese, for example, were brought to the
U.S. in the 1800s to build the transcontinental railroad and to complete other
massive labor-intensive projects. Consequently, many Chinese-American families
have been in the United States for many generations, are very familiar with
American culture and language, and are able to access the education and employment that leads to economic success. Many Vietnamese, in contrast, are relative
recent immigrants, having come to the U.S. to escape political oppression during the
Vietnam War in the 1960s. Recent immigrants may have far less familiarity with
American culture and language, especially if they cluster with other like immigrants
once in the states, lessening the need to interact with the broader culture. Individuals
in this situation are more likely experience poverty since they often have less education and limited access to well-paying employment (Forner & Fredrickson, 2004;
Segal et al., 2002). Given these different histories and the potential for each group to
maintain a distinct cultural heritage in the United States, it is reasonable to also
expect to find heterogeneity in the economic status of Asian Americans.
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Review of literature
Research on Asian Americans indicates a multidisciplinary approach, which is useful
for isolating and understanding the determinants of their income differentials.
Median earnings of Asian Americans exceed median earnings of all workers, both
male and female (Reeves & Bennett, 2004). Economists would use human capital
theory to explain this differential. According to this theory, labor income reflects
investment in human capital, primarily in the form of education (Becker, 1964). So,
the economist would argue that the high family income of Asians relative to other
races is simply a return to the high education levels of Asians (Min, 1999). Sociologists, in contrast, note that although Asians do have relatively higher levels of
education and earnings, they do not receive economic returns commensurate with
their education. Consequently, to achieve economic parity with whites, Asian
Americans must obtain relatively higher levels of education (Barringer, Takeuchi, &
Xenos, 1990; Min, 1999; Sakamoto & Yap, 2003). Sociologists take this relatively
unequal return to education as evidence of structural barriers in the labor market
and see a ‘‘dual labor market’’ rather than human capital investment as an explanation of Asian American’s relatively lower economic returns to educational
investment. In a dual labor market, high income, fringe benefits, opportunity for
advancement, unions, and job security are in the primary market, while just the
opposite is found in the secondary labor market. Central to this labor market theory
is the idea that the type of labor market a worker is in rather than their human
capital investment is a more accurate predictor of their earnings (Barringer et al.,
1990; Min, 1999).
Evidence exists that Asian Americans have utilized education to leverage their
economic position. Using Census data for 1960 and 1970 and income and education
data for 1976, Hirschman and Wong (1984) examined socioeconomic inequality
between blacks, Hispanics, Japanese, Chinese and Filipino (five minority populations) and non-Hispanic whites (the majority population). They found evidence that
Asian American’s ‘‘over achievement in educational attainment’’ helped Asian
Americans approach socioeconomic equivalence with whites (p. 584). They note,
however, that while overt discrimination by employers against Asians appears to
have abated, ethnic inequality embedded in differential access to institutions and
opportunity still persists.
After conducting a review of research on ethnic and racial stratification in the
United States, Waters and Eschbach (1995) concluded there is evidence that
‘‘employers may still use racial and ethnic queues in hiring’’ (p. 419), giving
further support to the idea that structural barriers in general and discrimination in
particular may limit the economic achievements of Asians. They also pointed out
that new immigrants are more likely to face barriers to entry in the labor market
due to language and cultural differences, a point echoed by Hirschman and Wong
(1981).
Attempting to ascertain why Asian Americans in general and Asian immigrants in particular did not achieve earning parity with whites, Zeng and Xie
(2003) compared earnings of four groups of workers: U.S. born whites, U.S. born
Asian Americans, Asian immigrants educated in the U.S., and Asian immigrants
with a foreign education. They found no earnings difference among those educated in the U.S., whether native whites, Asian Americans, or Asians who
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completed their education in the U.S. Asian Americans who completed their
education before immigrating to the U.S. earned around 16% less than the three
other groups. They concluded that ‘‘place of education plays a crucial role in the
stratification of Asian Americans, whereas race and nativity, per se are inconsequential once place of education is taken into account’’ (Zeng & Xie, 2003, p. 1).
Investigating reasons for difference in academic performance in math and reading
between Asian and white eighth graders, Kao (1995) concluded that much of the
relative success of Asian students could be attributed to cultural differences. Asian
parents invested more resources in their children’s education than white parents with
comparable household income, reflecting differing cultural values. Results of the
current census testify to Asian American’s continued commitment to education. In
2000, among those aged 25 and older, 50.9% of male Asian and Pacific Islanders had
earned at least a bachelor’s degree as compared with 31.7% of non-Hispanic whites.
For women, the percentages were 43.8 and 27.3%, respectively (Reeves & Bennett,
2003).
Sociologists take issue with use of median family income as a stand-alone measure
of economic success among Asian Americans. Min (1999) notes that ‘‘all Asian
ethnic groups have more workers per family than whites’’, a fact that does raise
median family income for Asians, but only in an effort to achieve equivalence with
white median incomes (p. 196). Further, Asian American residence is highly concentrated in New York City, Los Angeles, San Jose, and San Francisco, areas of the
country with a steep cost of living relative to the rest of the United States (Barnes &
Bennett, 2002; Chan, 2001). Finally, they note, averages conceal the socioeconomic
polarization of Asian ethnic groups. Asian refugees and recent immigrants from
mainland China fall far below other Asian ethnic groups in any measure of economic
status. Asians in this group have less than a high school education, are ill-equipped
to work in the American job market, and experience rising poverty rates at a time
when poverty rates among whites are tending to decline (Hirschman & Wong, 1981;
Lee, 1998; Min, 1999; Segal et al., 2002).
In summary, existing literature points to several factors that could influence the
household income level of Asian Americans. While human capital theory centers
attention on investment in education, the structural barrier view acknowledges the
role that recent immigration, language, and discrimination can play in keeping Asian
Americans from receiving returns on their education commensurate with white
Americans.
Method
Data and sample
Data for this study are from the 1% Public Use Microdata Sample (PUMS) of the
2000 Census. Several selection rules were used to create the sample used in this
research. From the entire 1% sample, individuals who were aged 20 or older, who
reported being head of household, and who were in a family household (married
couple, male householder, no wife present or female householder, no husband
present) were selected. These selection rules yielded a sample of adults and ensured
that only one record per household was retained.
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The 2000 Census was the first decennial census that allowed respondents to report
more than one race. Since it would be more difficult to discern racial and cultural
influences for multiracial individuals, in this exploratory study, it was decided to
focus on non-Hispanics who reported being one race only. Cases selected for this
analysis had responded either non-Hispanic white only (unweighted n = 547,232),
non-Hispanic black only (unweighted n = 73,811), non-Hispanic Asian Indian only
(unweighted n = 3,644), non-Hispanic Chinese Asian only (unweighted n = 5,155),
non-Hispanic Filipino Asian only (unweighted n = 3,864), non-Hispanic Japanese
Asian only (unweighted n = 1,931), non-Hispanic Korean Asian only (unweighted
n = 2,191) or non-Hispanic Vietnamese Asian only (unweighted n = 2,258) when
asked to identify race.
Conceptual framework
Human capital theory clearly points to education as a key factor in income and
economic status. For their educational achievements and consequent higher incomes, Asian Americans have been held up as a ‘‘model minority’’ that other
minority groups such as blacks should emulate. The revisionist critique of this picture of Asian Americans, in contrast, has emphasized a sociological model that
focuses on the structural barriers faced by Asian Americans who are trying to
achieve parity with non-Hispanic whites. Those criticizing the model minority view
of Asian Americans assert that one must also consider number of earners, higher
cost of living in the locales where Asian Americans cluster, and the ‘‘glass ceiling’’ in
professional fields that limits the degree to which Asian Americans can advance and
lowers return on their educational investment (Barnes & Bennett, 2002; Min, 1999;
Sakamoto & Yap, 2003; Varma, 2004).
Based on these views from economics and sociology, this research examines
income level as a function of human capital factors and structural barrier indicators.
Human capital measures include age (as a proxy for experience), age squared (to
capture possible nonlinear effects of age), educational attainment, and disability (as
a proxy for health status). Indicators of structural differences include race, household type, number of earners, occupation, region of residence, and acculturation
(American or foreign born and facility with English).
Empirical analysis
Means and proportions for the dependent and independent variables were computed
for each racial group: white, black, Asian Indian, Chinese, Filipino, Japanese,
Korean, and Vietnamese. Ordinary Least Squares Regression was used to evaluate
the impact of racial difference on household income level, controlling for human
capital and structural barriers. Two regressions were run. The first regression
included white only and black only racial groups with the six Asian racial groups.
The purpose of this regression was to compare the income level of the minority
groups (black and Asian) with the majority group. Thus, in this regression, white
only was the reference category. The second regression omitted white only and
included black only and the six Asian racial groups. The purpose of this regression
was to compare the income level of Asians, as a minority, with that of blacks,
another racial minority. In this regression, black was the reference category.
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Variable measurement
The dependent variable in this analysis is household income for 1999, as reported by
the householder. It is a continuous variable. Household income includes income of
the householder and all other individuals 15 years of age and older in the household,
regardless of relationship to householder. Eight types of income are included in
household income: wage or salary income; self-employment income; interest, dividends, or net rental income; Social Security income; Supplemental Security Income;
public assistance income; and retirement income.
Independent variables were classified in two broad categories: factors related to
human capital investment and factors that could indicate presence of structural barriers. Human capital investment was measured by age, age squared, educational
attainment and health. Age of the householder was a continuous variable used to proxy
experience—both in life and on the job—that could affect earnings and, hence, income.
Age squared is included in the analysis to capture possible non-linear effects of age on
earning capacity as suggested by the lifecycle hypothesis of income. Education
attainment of the householder is a categorical variable measured as less than high
school, high school diploma earned, some college (including earning an associate’s
degree), baccalaureate degree earned, or professional degree earned (includes master’s, doctoral, or professional practice such as law). High school diploma earned is the
reference category. The Census did not inquire about health status, but did gather
information on disability. To proxy health status, a dummy variable was created by
coding 1 if respondent said ‘‘yes’’ to the question of having a disability; 0 otherwise.
Factors associated with structural barriers in the literature include race, occupation, household type, family size, number of earners in the family, residence, and
measures of acculturation. Race was categorized as white only, black only, Asian
Indian only, Chinese Asian only, Filipino Asian only, Japanese Asian only, Korean
Asian only or Vietnamese Asian only. Since the literature indicates that many
Asians are in managerial and professional occupations, it was decided to focus on
this occupation in the analysis. A dummy variable was created, coded 1 if employed
in managerial and professional occupations, 0 otherwise.
Family’s need for income and ability to generate income is related to household
type, family size and number of earners. Married couples can allocate time to market
and non-market production in ways that enhance their joint productivity, making it
possible for them to generate more income than single headed households could
produce (Becker, 1991). Household type was measured as a set of three categorical
variables: married couple (1 if yes, zero otherwise), male-headed household, no wife
present (1 if yes, zero otherwise), and female-headed household, no husband present
(1 if yes, zero otherwise). In the regression analyses, married couple was the comparison group. The impact of family size on household income can vary. Larger
families certainly require more income than smaller families to provide the necessities of family life. But, larger families offer more opportunity than smaller families
to send additional family members into the labor market or to engage more family
members in household production activities that reduce the need for market goods
and services. Family size was measured as a continuous variable. Number of earners
in the family was measured as a set of categorical variables: no workers, one worker,
two workers, or three or more workers. Each was coded 1 if true, zero otherwise.
Having no earner was the comparison group.
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Residence was measured in two ways. First, non-metropolitan residence was included in the analyses as a dummy variable coded 1 if true, zero otherwise. Limited
employment options in non-metropolitan areas can contribute to lower household
income. Relatively greater racial homogeneity in non-metropolitan areas can increase the chance that racial discrimination will further limit economic opportunity.
Second, region of residence was measured as a set of categorical variables: Northeast, Midwest, South, and West. Census data indicates that Asian Americans concentrate in New York City in the Northeast and Los Angeles and San Francisco in
the West (Barnes & Bennet, 2002). In the multivariate analysis, West is the comparison category.
Acculturation is measured by native birth (1 if yes, 0 otherwise), and fluency in
English language (1 if fluent, 0 otherwise).
Findings and discussion
Descriptive analysis
To ascertain characteristics of the racial groups used in this study, means and proportions were calculated for each group. Results are given in Table 1. All Asian
groups report average household income levels above the level reported for black
households. Asian Indian, Chinese, Filipino and Japanese had average household
incomes above the average income for whites. Korean and Vietnamese average
household income was less than average income in white households.
Average age of the household head was generally in the 40s across the racial
groups. Japanese household heads, on average, were the oldest at 53.97. Asian Indian household heads, on average, were the youngest at 42.55.
Among the racial groups, the Asian Indians had a remarkably higher proportion
that had earned a professional degree—over 40%. Chinese and Koreans followed,
with 30 and 21%, respectively, achieving professional degrees. The Vietnamese had
the largest percentage with less than a high school education, 33%, perhaps indicating recent immigration and relatively slow acculturation.
Interestingly, among all racial groups, a relatively sizable proportion reported
having some form of disability. This finding could simply reflect the relatively older
age of the sample. The portion reporting a disability ranged between 18% of Chinese
to 32% of blacks.
The largest proportion of managers and professionals were found among Asian
Indians; 62% of that racial group reported having that occupational category. The
proportion of managers and professionals among Chinese and Japanese was also
relatively large at 48 and 43%, respectively. About one-third of those in the Korean,
Filipino, and White racial groups had managerial or professional occupations (38, 33,
and 30%, respectively)
Family size was close to three members across all racial groups. Average family
size ranged from a low of 2.92 among the Japanese to a high of 4.04 among the
Vietnamese.
Aside from blacks, the proportion of married couple households was somewhat
similar across the racial groups. Asian Indians had the largest proportion of married
households at 91%. In contrast, only 47% of blacks reported being married. The
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Household income
Human capital factors
Age
Education
< High school
High school
Some college
Bacc. degree
Professional degree
Disability
Structural barrier
indicators
Managerial/
professional
# in Family
Household type
Married couple
Male head
Female head
# Workers
No workers
1 worker
2 workers
3 or more
Non-metro
Region
Northeast
Midwest
South
West
American born
Fluent in English
44,725.96
45.74
0.27
0.31
0.24
0.09
0.05
0.32
0.19
3.32
0.47
0.08
0.45
0.14
0.39
0.36
0.10
0.05
0.15
0.16
0.60
0.09
0.97
0.99
49.78
0.14
0.30
0.28
0.16
0.11
0.21
0.30
2.97
0.83
0.05
0.12
0.14
0.28
0.47
0.11
0.06
0.20
0.27
0.34
0.18
0.99
0.99
Black
N = 74,979
69,577.66
White
N = 5,81,665
0.33
0.16
0.26
0.25
0.52
0.96
0.03
0.34
0.47
0.15
0.006
0.91
0.05
0.05
3.52
0.62
0.08
0.08
0.09
0.29
0.43
.20
42.55
94,802.34
Asian
Indian N = 3,665
Table 1 Means and proportions of select characteristics of the racial groups
0.28
0.07
0.14
0.51
0.68
0.73
0.09
0.28
0.48
0.15
0.004
0.84
0.006
0.10
3.39
0.48
0.21
0.13
0.10
0.22
0.30
0.18
47.22
79,846.46
Chinese
N = 5,180
0.11
0.07
0.12
0.70
0.78
0.96
0.05
0.22
0.46
0.26
0.004
0.76
0.07
0.17
3.81
0.33
0.10
0.13
0.23
0.36
0.09
0.25
47.80
77,647.49
Filipino
N = 3,932
0.07
0.06
0.07
0.80
0.77
0.91
0.14
0.35
0.40
0.10
0.007
0.79
0.06
0.15
2.92
0.43
0.08
0.20
0.26
0.29
0.16
0.19
53.97
86,067.17
Japanese
N = 1,948
0.22
0.10
0.19
0.49
0.56
0.67
0.09
0.35
0.42
0.13
0.006
0.82
0.04
0.14
3.30
0.38
0.09
0.20
0.20
0.30
0.21
0.19
46.06
66,710.11
Korean
N = 2,203
0.10
0.08
0.29
0.53
0.72
0.64
0.06
0.26
0.42
0.25
0.005
0.77
0.10
0.14
4.04
0.26
0.33
0.17
0.28
0.16
0.06
0.30
44.74
62,096.79
Vietnamese
N = 2,265
J Fam Econ Iss (2006) 27:588–600
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proportion of married couples among other racial groups ranged from 84% for
Chinese to 76% for Filipino. Non-married male-headed households were relatively
rare for all racial groups. Chinese had the lowest proportion at 0.6%; Vietnamese
had the highest at 10%. Blacks had the highest proportion of non-married femaleheaded households at 45%; Asian Indian had the lowest at 5%. For other racial
groups, the proportion ranged between 10% for Chinese and 17% for Filipino.
Fourteen percent of the White, Black, and Japanese groups were not employed,
the highest percentage across all racial groups. The relatively higher mean age
among the White and Japanese suggests that at least some of the 14% in those two
groups were retired. All racial groups except the Black were more likely to have two
earners as compared with one earner in the household. Filipino and Vietnamese
households were most likely to have three or more workers (26% and 25%,
respectively).
Few of any of the racial groups lived in a non-metropolitan area. The Asian
groups were far less likely to reside in a non-metropolitan area (0.4–0.7%) than were
whites (6%) or blacks (5%). Over a third of whites and sixty percent of blacks reside
in the South. Asian Indians lived predominately in the Northeast, while the
remaining Asian groups lived mostly in the West.
Virtually all whites and blacks were born in America. Asian groups show different
patterns of migration. Asian Indians and Koreans had the highest immigration rates
as just a little over half of their population had been born in the U.S. Close to 70% of
the remaining Asian groups had been born in the U.S., implying an immigration rate
close to 30%.
Fluency in English was quite high for whites and blacks, not a surprise. Among
the Asian groups, however, some interesting differences can be seen. Although
a relatively low proportion of Asian Indians were born in America, they had a
relatively high rate of English fluency. English fluency was also relatively high for
Filipino and Japanese Americans. English fluency was lowest for Koreans and
Vietnamese. These relatively low rates of English fluency are consistent with their
relatively higher rates of immigration. They may also indicate relatively greater
‘‘clustering’’ of these Asian groups in the U.S., attempting to maintain the home
culture and language on American soil.
In general, the descriptive analysis clearly indicates some heterogeneity across the
Asian groups. Higher levels of education among Asians do seem associated with
higher level of earnings, as suggested by human capital theory. But, two or more
earners are also more likely to be found in the households of the Asian groups with
relatively higher earnings, lending support to the argument that Asians must work
more to achieve economic parity with whites. Lower earnings for those with less
education and a lower proportion of native born also lend support to the presence of
structural barriers.
Multivariate analyses
Two multivariate analyses were conducted. Results are given in Table 2. The models
appear to be a reasonable fit. In the model that included both white and black
individuals, the independent variables explain about one-fourth of the variance in
the dependent variable. When whites were excluded but blacks were retained,
almost one-third of the variance in the dependent variable was explained by the
model.
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Table 2 Regression analysis
Comparing Asian racial
groups with whites and blacks
Parameter estimate
(standard error)
Human capital factors
Age
Age squared
Education
< High school
Some college
Baccalaureate degree
Professional degree
Disability
Structural Barrier Indicators
Household type
Single male headed household
Single female headed household
Race
Black
Asian Indian
Chinese
Filipino
Japanese
Korean
Vietnamese
Managerial/professional
# in family
Number of workers
One worker
Two workers
Three or more workers
Non-metro residence
Region
Northeast
Midwest
South
American born
Fluent in English
Intercept
F-value
Adjusted R2
1862.63*** (1100.30)
–12.53*** (0.28)
–5304.71***
8005.29***
31022.00***
52817.00***
–6565.92***
(233.77)
(191.33)
(238.11)
(286.97)
(182.05)
Comparing Asian
racial groups with blacks
(white excluded)
Parameter estimate
(standard error)
879.69*** (57.89)
–4.51*** (0.57)
–3541.49***
4535.62***
17689.00***
38696.00***
–2968.85***
(425.17)
(394.95)
(550.99)
(679.32)
(333.31)
–5241.04*** (329.83)
–19511.00*** (212.67)
–2999.11*** (575.90)
–15172.00*** (349.91)
–6561.99*** (230.93)
–1273.75 (915.19)
–4799.89*** (793.68)
–5144.54*** (904.45)
6267.72*** (1280.10)
–12066.00*** (1185.22)
–3104.89** (1174.71)
14176.00*** (185.39)
1732.96*** (66.63)
–
17885.00*** (826.91)
11460*** (746.52)
7998.89*** (812.33)
21444.00*** (1112.75)
5075.30*** (1038.11)
7682.52*** (1013.40)
12351.00*** (409.92)
739.73*** (110.42)
19861.00*** (267.50)
33021.00*** (274.37)
45075.00*** (343.90)
1967.99***
–5336.20***
–5308.38***
7635.48***
8848.28***
–44293.00***
7702.73***
0.24
(234.83)
(222.48)
(208.80)
(472.26)
(355.47)
(1100.31)
17297.00***
35175.00***
53272.00***
–7360.62***
(498.68)
(525.72)
(656.72)
(865.89)
332.05 (528.48)
–2819.63*** (542.13)
–6963.05*** (472.99)
12734.00*** (570.92)
12410.00*** (855.98)
–30,330*** (1804.69)
1686.18***
0.32
* P < .01; ** P < .001; *** P < .0001
The first analysis compares the six Asian groups and Blacks, as another minority
group in America, with whites. After controlling for human capital and factors
associated with structural barriers, significant differences between the six Asian
groups, blacks and whites were found. Being black was associated with $6,562 less
income per year than white’s income. When compared with the majority race
(white), Asian groups fared differently. Asian Indian income was not significantly
different from white income. Chinese, Filipino, Korean, and Vietnamese households
were worse off than the white majority households, having significantly lower
household income than whites, all else equal. Of these Asian groups, the discrepancy
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was smallest for the Vietnamese who had $3,104 less than white household income
and greatest for the Koreans who had $12,066 less than white household income. The
Japanese, however, were better off than whites, having $6,268 more household
income, after controlling for human capital factors and structural barriers. These
findings suggest that unmeasured differences in culture or discrimination may be at
work.
Controlling for race, support is found for both human capital investment theory
and existence of structural barriers. Being older (though the effect increases at a
decreasing rate, indicating a nonlinear relationship between age and income as
predicted by some human capital models), achieving higher levels of education,
being in a married couple household, having a managerial or professional position,
having a larger family, having more workers in the family, living in the northeast as
compared with the west, being native born and fluent in English were all significant
factors associated with higher levels of income. Having a disability was a significant
factor in lower levels of income as was Midwest or southern residence as compared
with living in the west.
The second analysis omitted the white group, focusing on the comparison of the
six Asian groups with blacks, another minority group. Results generally parallel the
previous analysis. It is noteworthy, however, that, all else equal, the incomes of all
Asian groups were significantly higher than the incomes of blacks. This result suggests that whatever unmeasured discrimination and structural barriers that may exist
in the labor market seems to have a larger, negative impact on blacks.
Implications
For educators and researchers, perhaps the most significant implication of this
research is that, even after controlling for possible different structural barriers to the
marketplace, higher education remains a vital key to improving household income
level in the United States. Gaining access to that education, in turn, relies heavily on
possessing fluency in the English language. It is striking to note that, although the
Asian Indians have the highest immigration rate at 48%, their levels of education
exceed that of whites, the majority race in America. Ninety-six percent of Asian
Indians are fluent in English. In contrast, only about two-thirds of Vietnamese are
fluent in English, most likely a contributing factor to their relatively lower levels of
education and income (Waters & Eschbach, 1995).
Unmeasured aspects of history, culture and preferences may also play a role in
differences in educational attainment and income differentials. Immigration of
various Asian groups has occurred at different points in time. Asian groups that have
been in the United States for more than one generation have opportunity to develop
social and economic resources and cultural knowledge that can enhance ability to
generate income. Typically, this opportunity to develop social, economic, and cultural capital is not readily available to the newer immigrant groups (Waters &
Jiménez, 2005). The clustering of Asians into managerial and professional occupations has been blamed on labor market discrimination that has forced many Asians
to become small business managers rather than professional corporate executives
(Chan, 2001). Such clustering could also reflect preferences of Asian workers who,
for whatever personal reasons, chose lower paying employment.
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599
There is evidence that various Asian racial groups may differ in the degree of
emphasis placed on education, occupational attainment, and entrepreneurship. U.S.
historical data indicate that the median income level of Japanese Americans surpassed that of native-born non-Asian Americans during the 1960s, a gain that has
been sustained ever since. Long hours of hard work and strategic acquisition of
income producing capital have been cited as reasons for the relatively higher income
of the Japanese Americans as compared with non-Asian and Asian racial groups in
America (ThinkQuest, 1998). Other immigrant cultures, in contrast, have placed less
emphasis on education or lack the language skills or cultural knowledge to be successful in higher education (Economic Report of the President, 2005; Waters &
Eschbach, 1995).
Findings of this research indicated several large differences among the six Asian
groups studied with respect to education attained, occupation, family size, number of
workers in the home, region of residence, and acculturation. The diversity of Asians
apparent in this research implies that much is to be gained in research by grouping
Asians into racial sub-groups rather than treating them as a homogeneous group.
Conclusion
Although the descriptive analysis indicates that four of the six Asian groups have
higher levels of average annual household income than whites, when influence of
factors other than race is controlled, a different picture emerges. In the multivariate
analysis Asian Indian household income was not significantly different from white
household income, whereas Chinese, Filipino, Korean, and Vietnamese household
income was significantly lower than white household income. Japanese household
income, in contrast, was significantly higher than white household income. This
result implies that discrimination and institutional barriers not captured in the
measures used in this study are not only present in the market, but may disproportionately affect some Asian groups more than others. Before policy or programs
are developed to address these differences, further research is needed to better
understand why this is the case.
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