trends in poverty and inequality among hispanics/media/documents/cd/events/... · 2016-05-26 ·...

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The Hispanic Economic ExperienceFederal Reserve Bank of Dallas

June 16, 2011

Trends in Poverty and Inequality Trends in Poverty and Inequality among Hispanicsamong Hispanics

Pia Orrenius, Dallas Fed &

Madeline Zavodny, Agnes Scott College

Disclaimer: The views expressed herein are those of the presenter; they do not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.

35

40

Poverty Rate

Poverty rates declined since 1970, Poverty rates declined since 1970, but not for Hispanicsbut not for Hispanics

10

15

20

25

30

35

Hispanics

Non-Hispanic Blacks

0

5

10

1970 1980 1990 2000 2010

Source: Authors’ calculations from IPUMS data from the 1970-2000 Censuses and the 2010 March Current Population Survey.

Non-Hispanic whites

2

14

16 All Hispanics Non-Hispanic Whites

Percent

Hispanics more likely to be at bottom of Hispanics more likely to be at bottom of the income distributionthe income distribution

4

6

8

10

12

0

2

4

1 2 3 4 5 6 7 8 9 10Deciles

Source: Authors’ calculations from IPUMS data from the 2009 American Community Survey.

Poverty PuzzlePoverty Puzzle

Poverty rates for nonPoverty rates for non--Hispanic blacks Hispanic blacks d d 10 i t i 1970d d 10 i t i 1970dropped 10 points since 1970dropped 10 points since 1970

Poverty rates for Hispanics stagnantPoverty rates for Hispanics stagnant

Why?Why? Immigration? Immigration?

3

30Poverty Rate

Hispanic immigrantHispanic immigrant--native poverty native poverty gap at record high in 2010gap at record high in 2010

Immigrants

20

25

Natives

15

1970 1980 1990 2000 2010


40

45

Poverty Rate

Hispanic immigrants from Mexico Hispanic immigrants from Mexico have highest poverty ratehave highest poverty rate

15

20

25

30

35

40

Cuba

Mexico

Central America

Caribbean

Puerto Rico

5

10

15

1970 1980 1990 2000 2010


South America

4

So far…So far…

HispanicsHispanics Improvement in poverty rates limited to Improvement in poverty rates limited to

nativesnatives

Poverty rates for immigrants worsened in Poverty rates for immigrants worsened in recessionrecession

What if we follow groups over time?What if we follow groups over time?New immigrants have higher poverty than New immigrants have higher poverty than established immigrantsestablished immigrants

35

40

Poverty Rate

Hispanic immigrant cohorts: Hispanic immigrant cohorts: poverty rates drop with time in U.S.poverty rates drop with time in U.S.

15

20

25

30

352005-2010

1965 1970

1995-2000

1985-1990

1975-1980

5

10

15

1970 1980 1990 2000 2010


1965-1970

5

35

40

Poverty Rate

Hispanic natives: Hispanic natives: poverty rates drop with agepoverty rates drop with age

15

20

25

30

35

2010

2000

5

10

15

1970 1980 1990 2000 2010


1970

19901980

Explaining the poverty gapExplaining the poverty gap

Oaxaca decomposition (2009 ACS)Oaxaca decomposition (2009 ACS) Gap is due to differences in characteristics Gap is due to differences in characteristics

((explainedexplained) and returns to characteristics ) and returns to characteristics ((unexplainedunexplained))

ExampleExampleEducation differences: 9.6 % less than high school Education differences: 9.6 % less than high school

39 1 % l th hi h h l d39 1 % l th hi h h l dvsvs 39.1 % less than high school degree39.1 % less than high school degree

Returns to education differ: reward for an Returns to education differ: reward for an additional year of education additional year of education

Unexplained portion could be many factors…Unexplained portion could be many factors…

6

12

14% points

What explains the poverty gap? What explains the poverty gap? Hispanics vs. nonHispanics vs. non--Hispanic whitesHispanic whites

0

2

4

6

8

10

2. Hours worked

3. Age4. Education

1. English

-2

Source: Authors’ calculations from IPUMS data from the 2009 American Community Survey.

8

10% points

What explains the poverty gap? What explains the poverty gap? Hispanic natives vs. nonHispanic natives vs. non--Hispanic whitesHispanic whites

0

2

4

6

-2

Source: Authors’ calculations from IPUMS data from the 2009 American Community Survey .

7

14

16% points

What explains the poverty gap? What explains the poverty gap? Hispanic immigrants vs. nonHispanic immigrants vs. non--Hispanic whitesHispanic whites

0

2

4

6

8

10

12

-2


Poverty gapsPoverty gaps

Explained byExplained by English speaking abilityEnglish speaking ability

Hours workedHours worked

AgeAge

EducationEducation

Unexplained portionUnexplained portionUnexplained portionUnexplained portion Biggest for Hispanic nativesBiggest for Hispanic natives

8

What else?What else?

Lack of legal statusLack of legal status Lower wages: Work for less, change jobs Lower wages: Work for less, change jobs

more often, less training, fewer promotions, more often, less training, fewer promotions, no benefitsno benefits

Less public assistance: No cash welfareLess public assistance: No cash welfare

Great RecessionGreat Recession

What does the future What does the future hold for Hispanics?hold for Hispanics?

Danger signsDanger signs OneOne--third Hispanic children live in poor third Hispanic children live in poor

familiesfamilies

Troubling trendsTroubling trends Rise in nonRise in non--marital birthsmarital births

Growing elderly populationGrowing elderly population Growing elderly populationGrowing elderly population

Helpful policiesHelpful policies Education, immigration reformsEducation, immigration reforms

9

Thank you!Thank you!

10

Economic summary statisticsEconomic summary statistics

White Non-

Black Non-

Foreign Born Native

Hispanics Hispanics Hispanics Hispanics HispanicsIn labor force 64.9 63.3 68.9 70.5 67Employed 91.7 84 88.1 89.3 86.5Wage 46,006 32,183 29,137 27,050 31,874Family income 79,575 52,054 55,377 49,553 62,683Poverty 9.3 20.7 19.5 22.3 16.1Education

Less than high school 9.6 18.4 39.1 50.6 20.7High school 29.3 31.6 26 24 29.3

Some college 30 32.3 22.2 15.4 33.1College or above 31.1 17.7 12.7 10.1 16.9

Demographic summary Demographic summary statisticsstatistics

Whit Bl kForeign

B N tiWhite Non-Hispanics

Black Non-Hispanics Hispanics

Born Hispanics

Native Hispanics

Mean age 40.1 33.7 28.9 39.8 21.6Median age 41 32 27 38 16Average family size 2.6 2.8 3.5 3.7 3.4Average number of children 0.6 0.9 1.3 1.4 1Married 54.0 30.1 46.6 55.1 36.1Divorced 11 5 12 8 2 7 6 9Divorced 11.5 12 8.2 7.6 9Single female head 25.4 40.7 28 24 33Speaks English well 99.3 99.1 72.7 52.8 97.1

11

35Poverty Rate

Poverty rate of young Hispanic Poverty rate of young Hispanic immigrants over time, by arrival immigrants over time, by arrival

cohortscohorts2005-2010

15

20

25

30

1965-1970

1995-2000

1985-19901975-1980

5

10

1970 1980 1990 2000 2010


0.50Gini index

Hispanics have more inequality than nonHispanics have more inequality than non--Hispanic whites, less than blacksHispanic whites, less than blacks

0 45

0.46

0.47

0.48

0.49

0.43

0.44

0.45

Non-Hispanic Whites Non-Hispanic Blacks Hispanics


12

0.50Gini index

Income inequality among Hispanics Income inequality among Hispanics varies by country of birthvaries by country of birth

0.44

0.46

0.48

0.40

0.42

Puerto Rico

Cuba Natives Central America

Mexico South America

Caribbean


14

16 Hispanics Non-Hispanics

Percent

Percent in each Percent in each deciledecile: NB Hispanics : NB Hispanics vs. NB nonvs. NB non--HispanicsHispanics

4

6

8

10

12

0

2

4

1 2 3 4 5 6 7 8 9 10Deciles


13

14

16 Hispanics Non-Hispanics

Percent

Percent in each Percent in each deciledecile: FB Hispanic vs. : FB Hispanic vs. FB nonFB non--HispanicHispanic

4

6

8

10

12

0

2

4

1 2 3 4 5 6 7 8 9 10Deciles


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