Why Indian-American Women Make More Money Than White Guys

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Why Indian-American Women Make More Money Than White Guys

About 72 percent of Indian-Americans have four-year college degrees, and a whopping 40 percent have some professional or graduate degree.

WASHINGTON:  On Monday, an economist at the right-leaning American Enterprise Institute had something snarky to say about a new government report on the gap between men's and women's earnings.

Economist Mark Perry wrote that the median Asian-American woman earns only about 3 percent less than the median American man, according to the latest Bureau of Labor Statistics data. The median Asian-American woman also earns significantly more than the median black or Hispanic man in the United States.

"Do those pay disparities reflect gender discrimination against men? Or minority (Asian) privilege?" Perry quipped.

Perry was making a point about how statistics on the gender pay gap tend to be deployed in misleading ways. Full-time working women may earn 79 cents on the dollar compared to men, according to the Census, but that figure doesn't take into account the gender differences in education and career choices, among other things.

But look within the data, and you see even more striking examples -- which themselves reveal the different dynamics that explain why men and women of different backgrounds earn different wages.

Compared to non-Hispanic white men, Indian-American women actually earn more on average, and Chinese-American women earn about the same. (This is based on data on annual incomes from the 2014 American Community Survey, which are slightly different from the weekly wage data used by the BLS -- but the idea is the comparable.)

Education has a lot to do with the Asian-woman advantage. More than half of Asian-Americans over 25 have a bachelor's degree or higher, compared to only 33 percent of non-Hispanic whites. And 21.8 percent of Asian-Americans also have graduate or professional degrees, compared to 12.8 percent of non-Hispanic whites.

In other words, Asian-Americans are 50 percent more likely to have bachelor's degrees, and nearly twice as likely to hold PhDs, law degrees, MBAs, or MDs.

Educational attainment is even higher for some ethnic groups. About 72 percent of Indian-Americans have four-year college degrees, and a whopping 40 percent have some professional or graduate degree.

Think about that stat for a second. Indian-Americans are more likely to have advanced degrees than white Americans are likely to have finished college.

It's not surprising then, that Asian-Americans tend to earn more than other groups. It's fairer to compare Asian-American women to Asian-American men, who have similar, if slightly higher rates of educational attainment.

Compared to Asian-American men, Asian-American women only make 78 cents on the dollar, according the BLS, which is the largest gender gap among these racial and ethnic categories. The smallest gender gap was among African-Americans -- black women earn nearly 90 cents on the dollar compared to black men.

But this is still a crude way to control for the effect of education. We can break down the data further by only looking at college graduates.

Here, it becomes clear that Asian-American women with college degrees or more are still at a significant disadvantage compared to non-Hispanic White and Asian-American men. On the other hand, female Asian-American college graduates are roughly on par with Hispanic and black men. The gender gap persists even if you concentrate on people with professional degrees, like lawyers and doctors.

This just a tiny preview of the kind of slicing and dicing that economists have done trying to explain the gender wage gap.

Increasing education among women won't help close that gap -- women already graduate from college at higher rates than men. And as the data above show, female graduates still make less than men. Education helps explain why Asian women out-earn typical American men, but differences in education are not the reason women overall earn less than men.

Other explanations for the gender pay gap are more significant. Women tend to take time off to have kids, which impacts their career paths. Women also concentrate in less lucrative occupations and industries, in part because of their own preferences and in part because some male-dominated fields have historically excluded women.

Yet, after accounting for race, education, experience, career choice, and so on, economists Francine Blau and Lawrence Kahn found that about two-fifths of the gender pay gap remained unexplained by those factors, leaving gender discrimination as a major culprit.

© 2016 The Washington Post

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