Beyond the Averages: A decomposition analysis of poverty disparities among white and Asian American ethnic subgroups

• In Event: Intersecting Inequities: Discrimination, Policy, and Health in Underrepresented Communities

Abstract

Racial and ethnic disparities in poverty are a persistent feature of inequality in the United States. While the empirical literature has extensively examined white–Black and white–Hispanic poverty gaps, the Asian American population remains understudied, particularly when disaggregated by ethnic group. As an aggregate, Asian Americans share some similarities with the white population, but this masks considerable variation. Many Asian ethnic groups experience poverty rates well above those of white Americans, with some nearing the levels observed among Black, Hispanic, and American Indian populations. This includes Chinese Americans, the largest Asian ethnic group in the U.S., who alone comprise a quarter of the Asian American population, as well as Vietnamese and Korean Americans, who comprise of 20 percent of the Asian American population together.

To better understand these respective white–Chinese, white–Vietnamese, and white–Korean poverty disparities that are the result of different combinations of factors, the present study estimates the extent to which household- and individual-level demographic characteristics account for observed disparities in Supplemental Poverty Measure (SPM) rates using a Fairlie decomposition approach. The study draws on the 2015-2019 American Community Survey (ACS), a nationally representative dataset that provides rich demographic, labor market, and economic indicators, and uniquely identifies Asian ethnicities. Extending upon prior literature, the present study incorporates measures of English proficiency and focuses on immigration, geographic contexts, education, employment, family structure, and disability status.

The findings indicate that measurable demographic characteristics explain 76, 63, and 67 percent of the poverty gaps between the white population and Chinese, Vietnamese, and Korean Americans, respectively. Immigration factors, especially nativity, are key drivers across these groups. Despite common rhetoric that Asian American parity with the white population is driven by high educational attainment, the present study finds that education plays different roles within each group. Notably, it narrows the SPM gap for Chinese and Korean Americans, but has minimal explanatory power in the white–Vietnamese gap. Additionally, the role of educational attainment as a protective factor for narrowing poverty gaps warrants further exploration, as the higher average educational attainment among Chinese and Korean populations relative to the white population do not necessarily translate to lowered poverty rates, suggesting the returns to education are limited when other immigration contexts like foreign-born status and limited English proficiency come into play. Lastly, the sizable unexplained portions of the decompositions highlight the potential influence of unmeasured factors, including structural racism and discrimination. These findings shed light on the importance of disaggregating Asian ethnic groups in research, policy, and social services aimed at addressing economic insecurity among Asian American communities.

Author

• Stacie Tao, The University of Chicago
  Presenting Author