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Dollars and sense of American desis

May 23, 2012

Immigrants born in India outdo others in achieving economic success in the United States. Pakistan-born immigrants, while trailing behind Indians, do better than the native-born Americans.

The estimates reported in the 2010 American Community Survey revealed that the median salaried household income of India-born immigrants was around $94,700. In comparison, the median household income of native-born Americans was estimated at $51,750. Unlike the Pakistan-born immigrants in Canada, who lagged behind others in economic prosperity, Pakistanis in America are relatively thriving where the median household income of Pakistan-born immigrants is 18 per cent higher than that of the native-born Americans.

The American Community Survey for 2010 (latest data available from the US Census Bureau) reveal that amongst South Asians living in the US, India-born immigrants are far ahead of Pakistanis, Bangladeshis, and Afghanis. Even when compared with immigrants from Egypt, a country known for supplying highly educated  immigrants to the US, Indians report exceptionally higher indicators of economic progress.

Source: American Community Survey, 2010

Indian-born immigrants also reported one of the lowest poverty rates at 4 per cent. Afghanistan-born immigrants reported the highest poverty rate where one in five Afghan immigrants was deemed below the poverty line in the US. While Pakistan-born immigrants reported higher median household incomes than the native-born Americans, surprisingly 14 per cent of the Pakistan-born immigrants were below the poverty line compared to only  9.4 per cent of the native-born Americans.

Another indicator of financial distress amongst households in North America is the percentage of household income spent on gross rent. Households spending 30 per cent or more of household income on rent are considered financially distressed. Amongst households who live in rental units, 57 per cent of the immigrants from Pakistan, Bangladesh, and Egypt spent more than 30 per cent of the household income on rent compared to only 24 per cent of immigrants from India.

Source: American Community Survey, 2010

These poverty statistics raise several questions. For instance, despite having similar South Asian heritage, Pakistan-born immigrants report a 2.4-times higher rate of poverty than their Indian counterparts. Furthermore, poverty among younger cohorts (18 years old or younger) is even worse amongst immigrants from Pakistan than from India. At the same time almost 50 per cent of under-18 Afghan immigrants are reportedly below the poverty line in the US. These statistics necessitate the need to explore the reasons behind disparities amongst immigrants from South Asia.

I am presenting here a socio-economic comparison of South Asians in the US. I have restricted the reporting to immigrants from India, Pakistan, Bangladesh, and Afghanistan. This is done because India, Pakistan, Bangladesh, and to some extent Afghanistan have more in common in culture and recent history than other countries in South Asia. I have thrown in Egypt for good measure to serve as a control for immigrants from another Muslim country with a different cultural background.

The purpose of this comparative review is to determine what are the reasons behind the success of India-born immigrants in the US. Could it be that the immigrants from India had luck on their side, or could it be that Indian immigrants possessed the necessary ingredients to succeed in the highly competitive labour market in the United States. More importantly, one needs to explore why immigrants from Pakistan and Bangladesh lag behind those from India in achieving the same levels of economic success.

Sizing the South Asians:

With approximately 1.8 million individuals, India-born immigrants form the largest cohort amongst South Asians in the US. The American Community Survey (ACS) in 2010 estimated Pakistan-born immigrants at 300,000, Bangladesh-born immigrants at 153,000, and Afghanistan-born immigrants at 60,000. Egypt-born immigrants totalled 133,000. Immigrants from India were approximately five-times the size of Pakistan-born immigrants. The relatively large size of Indian immigrants leads to larger social networks, which help with searching for better employment prospects.

Despite their large size, most India-born immigrants in the US are recent arrivals. Whereas 47 per cent of the India-born immigrants arrived in the US after 2000, only 36 per cent of the Pakistan-born immigrants arrived after 2000. This suggests that the economic success of  immigrants from India is driven by the recent arrivals. Relatively speaking, immigrants from Afghanistan have enjoyed the longest tenure in the US of all South Asian countries discussed here. Notice that while 42 per cent of immigrants from Afghanistan arrived in the US before 1980, only 25 per cent of the Indian immigrants accomplished the same.

Source: American Community Survey, 2010

Pakistanis have larger families:

With 4.3 persons per households, immigrants from Pakistan and Afghanistan reported significantly larger family sizes. In comparison, the native-born population reported a household size of 2.6 persons whereas the size of India-born immigrant households was around 3.5 persons. The difference between immigrants from India and other South Asians is more pronounced when one looks at the per capita earnings. Owing to their smaller household size, immigrants from India reported significantly higher per capita incomes than the rest. For instance, Bangladesh-born immigrants reported 50% less in median per capita income than those from India. And while immigrants from Pakistan reported higher household incomes than the immigrants from Egypt, the larger household size of Pakistan-born immigrants brought their per capita incomes lower than that of Egyptians.

Larger household size results in overcrowding, especially amongst low-income households, who often live in rental units. The average household size of rental households from Pakistan was found to be 33 per cent larger than the same from immigrants from India. Fifteen per cent of households from Pakistan were found to have more than one occupant on average per room compared to only 6 per cent of those from India.

Women in the labour force:

A key source of distinction between the immigrants from India and other South Asians is the higher participation of Indian women in the labour force. A much higher integration of women in the labour force is one of the reasons why immigrants from India have fared much better than others in the United States. Consider that only 42 per cent of the women from Pakistan were active in the labour force in the US compared to 57 per cent women from India. In fact women from Pakistan reportedly the lowest participation in the labour force in the US falling behind women from Egypt, Afghanistan , and Bangladesh.

Education matters the most:

It should come as no surprise that immigrants from India are one of the most educated cohort in the United States. Almost 42 per cent of immigrants from India over the age of 25 reported having a graduate (Masters) or a professional degree. In comparison, only 10 per cent of the native-born adults reported having a graduate or professional degree. Approximately 23 per cent of adult immigrants from Egypt and Pakistan reported having a graduate or professional degree.

The correlation between higher education attainment and higher median household incomes is explicitly presented in the graph below. India-born immigrants with professional degrees also reported significantly higher incomes than the rest. In comparison, immigrants from Afghanistan with one of the lowest incidence of professional degrees reportedly the lowest median household incomes.

Source: American Community Survey, 2010

The gender divide is again instrumental between immigrants from India and the rest. Whereas 70 per cent of the India-born female adults reported having a Bachelors degree or higher, only 46 per cent of adult females born in Pakistan reported the same in the US. At the same time only 28 per cent of the native-born female adults in the US reported completing university education.

Better education better careers:

The education attainment levels amongst adult immigrants determine, to a large, extent their career choices. University education resulting in professional or graduate degrees allows immigrants to qualify for well-paying jobs in the US. Immigrants from India have been able to use their high-quality education to make inroads in the high-paying employment market. One is therefore hardly surprised to see that of the adult employed population, 70 per cent immigrants from India are working in occupations focusing on management, business, science, and arts. In comparison, only 44 per cent of immigrants from Pakistan ad 33 per cent immigrants from Bangladesh are employed in similar occupations.

What have we learnt:

"Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!"

In 1883, Emma Lazarus asked for the tired, the poor, and the wretched refuse. India instead sent its very best to the United States. Instead of the huddled masses, graduates from Indian Institutes of Technology and Management arrived in hundreds of thousands at the American shores. These immigrants were products of a sophisticated higher education system whose foundations were laid by Pandit Nehru in early fifties.

In the rest of South Asia, especially in Pakistan and Bangladesh, education has never been a national priority. The results of such conflicting priorities are obvious. Graduates from Indian universities are outdoing others in competitivelabour markets at home and abroad.

If education is not made a national priority, the gap between Indians and other South Asians will grow at home and in diaspora.


Murtaza Haider, Ph.D. is the Associate Dean of research and graduate programs at the Ted Rogers School of Management at Ryerson University in Toronto. He can be reached by email at murtaza.haider@ryerson.ca


The views expressed by this blogger and in the following reader comments do not necessarily reflect the views and policies of the Dawn Media Group.