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Wealth Inequality Among Immigrants: Consistent Racial/Ethnic Inequality in the United States

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Abstract

Wealth is a strong indicator of immigrant integration in U.S. society. Drawing on new assimilation theory, we highlight the importance of racial/ethnic group boundaries and propose different paths of wealth integration among U.S. immigrants. Using data from the Survey of Income and Program Participation and quantile regression, we show that race/ethnicity shapes immigrant wealth inequality across the entire distribution of net worth, along with immigrants’ U.S. experience, such as immigrant status, U.S. education, English language proficiency, and time spent in the United States. Our results document consistent racial/ethnic inequality among immigrants, also evidenced among the U.S. born, revealing that even when accounting for key aspects of U.S. experience, wealth inequality with whites for Latino and black immigrants is strong.

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Notes

  1. Other requirements for naturalization include immigrants’ physical presence in the United States for set time periods (for some paths to naturalization), good moral character, English and civics knowledge, and attachment to the Constitution (U.S. Citizenship and Immigration Services 2013).

  2. We are aware of several exceptions. Stewart and Hyclak (1984) find no difference in earnings for immigrants’ pre- and post-migration schooling. There is evidence that higher education is rewarded among Arab immigrants (Aly and Ragan 2010). Nurses educated abroad earn higher wages in the United States than U.S.-educated nurses, which reflects the number of nurses with experience working in hospitals or in English-speaking countries (Huang 2011).

  3. There is likely important variation by source country in the devaluation of foreign education as immigrants from countries that commit more resources to education and/or have comparable educational systems to the United States likely experience a better transition of their skills and educational credentials (Bratsberg and Ragan 2002; Schoeni 1997).

  4. The quality of the asset and debt data in SIPP have been examined elsewhere (Czajka et al. 2003; Hao 2007) with Hao (2007) providing a detailed explanation of the advantages and disadvantages of the various SIPP wealth measures. She notes that the SIPP wealth data compare favorably to the Survey of Consumer Sciences, which is considered the benchmark data to study U.S. wealth.

  5. These questions are included in the Wave 2 topical file in the 2004 data.

  6. Native Americans included American Indians, Aleutians, and Eskimos.

  7. U.S. Territories included American Samoa, Guam, Puerto Rico, and the Virgin Islands.

  8. The nativity subsamples do not total the amount of the full analytical sample. This is due to respondents entering or exiting the SIPP sample between waves. See the missing data discussion for details.

  9. For the rest of the paper, we shorten the label for racial/ethnic groups by dropping “non-Latino.”

  10. The residual category includes students, certain refugees/asylees, and undocumented immigrants, among others.

  11. Appendix Table 6 contains the values used to create Fig. 1.

  12. In additional analyses not shown here, we used the same approach to compare the pattern displayed in Fig. 1 to the wealth distributions of immigrants and the native born. The patterns by nativity status were similar to that presented in Fig. 1.

  13. To conserve space, Tables 3, 4, 5 present coefficients and significance levels for the explanatory variables. Full results are available from the authors upon request.

  14. In supplemental analyses, we explored interactions between the race/ethnicity and immigrant status variables. The results suggested that there was little variation by immigrant status within racial/ethnic groups.

  15. The one difference is that the reference group for immigrant status is the native born in Table 3 and naturalized citizens in Table 4.

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Acknowledgments

We thank Ariela Schachter for helpful comments on a previous draft. This research was supported in part by Grant R03HD058693 from the National Institute of Child Health and Human Development (principal investigators: Zhenchao Qian and Matthew Painter).

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Correspondence to Matthew A. Painter II.

Appendix

Appendix

See Table 6.

Table 6 Net worth for full sample and racial/ethnic groups, by select percentiles

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Painter, M.A., Qian, Z. Wealth Inequality Among Immigrants: Consistent Racial/Ethnic Inequality in the United States. Popul Res Policy Rev 35, 147–175 (2016). https://doi.org/10.1007/s11113-016-9385-1

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