Within-group Income Inequality among Asian American Families

Abstract

Asian Americans have long been portrayed as a “model minority” for their relatively high socioeconomic standings in contemporary America. However, this characterization oversimplifies the economic circumstances of Asian Americans, as they also show the highest within-group inequality among all racial and ethnic groups. Asian Americans’ high within-group inequality highlights the convergence of class inequality, racial disparity, as well as the diversity of their immigration status. Focusing on the reasons that account for Asian American within-group inequality, this thesis utilizes both ordinary least square (OLS) regression and conditional quantile regression to uncover the difference in within-group inequalities between non-Hispanic white families and Asian American families. The results show that Asian American families indeed have a 24% higher income inequality (as measured by the gap between the ninetieth percentile and the tenth percentile) than whites. However, the higher income inequality is reduced to as low as 6.2% after controlling for demographic characteristics, human capital variables, immigration status, and family composition variables. As Asian American demographic characteristics and family composition have a counteracting effect on their income inequality, human capital combined with immigration status thus explains over 75% of their higher income inequality.