Inequality Between and Within Immigrant Groups in the United States

The increase in income inequality has been one of the de ning economic trends of the past forty years. The increase in inequality in the United States has been attributed to skill-biased technological change, globalization, and a a changing institutional environment. To what extent can these factors explain rising inequality? I attempt to answer this question by looking at income inequality both within and between immigrant groups in the United States. There is tremendous variation in income inequality between these groups, with Gini coe cients ranging from 0.59 for immigrants from the MENA to 0.42 for immigrants from Mexico. There are also large di erences in inequality between di erent enclaves of immigrants from the same source country. For example, MENA immigrants living in Michigan have an income Gini coe cient of 0.61 as compared to 0.55 for MENA immigrants living in New Jersey. To what extent are di erences in inequality between immigrant groups driven by observable characteristics that di erentiate these groups? What features of these immigrant enclaves drive di erences in immigrant inequality? In this study, I exploit the variation in income inequality both between and within immigrant groups to estimate the micro level determinants of income inequality using a broad sample of 32 immigrant groups distributed across a wide range of ethnic enclaves derived from ACS data. I utilize a regression decomposition technique from Fields (2003) and nd that most of the inequality between immigrant groups can be explained by observable characteristics like education, leaving little left over for unobservable cultural factors. Within groups, there is some variation in the determinants of inequality. For groups like Iranian immigrants, inequality is driven by educational di erences, suggesting a policy aimed at increasing educational opportunities. For Mexican immigrants, the largest determinant of inequality is gender, suggesting policies aimed at reducing gender disparities in income. Other groups like Vietnamese immigrants see inequality driven by the amount of time in the US, suggesting policies aimed at accelerating assimilation. That the sources of inequality di er across groups implies a more nuanced approach to crafting policies aimed at reducing income inequality.