Color Lines, Country Lines: Race, Immigration, and Wealth Stratification in America

Chapter 7. Wealth Stratification, Assimilation, and Wealth Attainment

Wealth Stratification, Assimilation, and Wealth Attainment D escriptions of assets and debts in the previous chapters show large gaps in the wealth holding status and wealth components among racial-ethnic groups and immigrant origin-country groups. The conceptual framework developed in chapter 2 provides a rationale for how nativity differences can be subsumed by race-ethnicity and education. Such a structure allows immigration dynamics to create new social forces and transform existing wealth stratification processes. For example, later I note that though rates of return to education may favor racial minorities, postsecondary degrees earned in developing countries may offset this advantage. A strong motivation to improve the life chances of family and children and a home culture that honors having children may boost asset building among immigrants, regardless of their current marital or parenthood status. The notion of wealth attainment refers to situations in which households have more assets than debts. Wealth attainment is more comprehensive than income attainment and other economic measures. Most households have some income, a substantial proportion do not have greater assets than debts, and some have no assets. Wealth attainment thus encompasses both the probability of an attainment threshold (having more assets than debts) and the amount of wealth above it. Beyond the purely economic, wealth attainment encompasses values, preferences , and lifestyles, all latent dimensions manifested in wealth attainment and the wealth portfolio. For these reasons, wealth attainment is an ideal concept for the study of assimilation. In this chapter, by looking at how it is stratified for both natives and immigrants, I examine the relationships among race, immigration, assimilation, and wealth stratification. Chapter 7 213 Empirical Models The integrated framework in chapter 2 develops three ideal-type scenarios arising from a multifactor stratification system (recall figure 2.1). Based on the important roles of racial hierarchy and human capital, I hypothesize a dominance-differentiation system for the stratification of wealth, where race and education are primary factors (dominance) and nativity and immigrant characteristics are secondary factors (differentiation ). The change scenario, if tested and confirmed, implies that immigration will eventually transform the existing stratification order and blur color lines. Moreover, the analysis here offers indirect tests regarding two theses of Richard Alba and Victor Nee’s new assimilation model, that different immigrant groups assimilate at different paces and that the mainstream is a hybrid of cultures. Figure 7.1 is an application of the theoretical model in figure 2.1 to wealth attainment in the contemporary immigration era. Starting from a race-education-nativity stratification system, model 1 (M1, see this chapter ’s appendix for a full discussion of models and methods) specifies that wealth attainment is a function of race-ethnicity, education, and nativity, controlling for household characteristics and the period effects of the years in which the data were collected. If the coefficients for race, education, and nativity are all significant, then they are all primary factors. If, instead, the coefficient for nativity is insignificant, then nativity is not a primary factor. We move to the right panel of figure 7.1. The next tasks are to determine whether nativity should be eliminated or retained and whether race and education are interdependent, tasks achieved by examining the interdependence among the three stratification factors in model 2 (M2). If some of the interaction terms for race, education , and nativity are significant, we move to model 3 (M3) for a separate analysis for each of the four racial-ethnic groups. In model 3, we examine the differentiation within racial-ethnic groups by nativity and the interdependence of nativity and education. Finally, instead of using immigrant status, I use country of origin, age at arrival, and naturalization status in model 4 (M4). Results from M4 can help explain the degree of differentiation by specific immigrant characteristics , particularly by addressing the impact of immigrants’ selfselection . Nativity differentiation can also be further examined by allowing different effects of household characteristics by nativity in model 5 (M5). Models 3, 4, and 5 also test another hypothesis from the integrated framework, namely, immigrants’ assimilation through wealth attainment . The new assimilation theory emphasizes the process of assimilation . Results from these models can help gauge the degree to which dif214 Color Lines, Country Lines M2 M1 M3 M4 M5 Race, Education, Nativity All Primary Factors Independence Interdependence Elimination of Nativity Dominance of Race and Education...