Archive for January, 2013

Last week, on the occasion of my daughter’s seventh birthday, a few friends were invited for dinner.  While food and drinks formed an integral part of the celebration, the highlight, as always, was the “adda” (colloquial Bengali for casual conversation). All involved were Indians- more precisely, Bengalis. Being the host, I was mobile most of the time hopping among clusters of guests. That is, until I chanced upon a lively discussion over Indo-Chinese appetizers. The topic was the relative financial success of first generation Indian and Asian immigrants and how it changes for subsequent generations when compared to other racial/ethnic groups in the US.  The participants were almost all first generation immigrants (i.e. who were born and raised outside of the US, but later immigrated and settled in the US) except for a single bright young college student representing the second generation.

The Motion

Asian Indians widely believe (this is anecdotal, though), quite narcissisticaly,  that the average Indian household is relatively better off compared to an average American household. Why? Popular belief is that most Indians who emigrate,  do so because they want to pursue higher studies and better jobs. The procedural and financial commitments involved ensure that the most driven of these individuals, also referred to as the “cream of the crop” make it to the United States. [Disclaimer: I would argue that this crop is only tiny only a tea spoon full of the “cream” with the remainder pursuing their interests, quite successfully, in the homeland. But that is another argument for another day]. Over time, these immigrants (in the US) climb up the ladder of success because of their drive, hard work, ambition, and acumen.

However, some conclude, the offspring, may not have the same characteristics (as traits often skip a generation, or two) and may be more like the other Americans – following their own likings over pragmatic options for financial success, for myriad reasons. Therefore, the average second generation Indian immigrant, will likely be less ahead of the fellow average American than his/her parents. In statistical terms, if the income distribution for all Americans forms a normal distribution, the average income of the first generation Indian immigrants would be further to the right compared to the second or succeeding generation.

The argument against the motion is that the second/succeeding generation is more likely to increase the gap with the average American, because they not only have a high chance of inheriting the drive, intellect and other virtues of their parents, but also will have the advantage of better opportunities that their predecessors did not have during their third world upbringing.

I was instantly attracted to this exciting discussion – particularly because this argument stood a better chance of being proved (or disproved), unlike many others.  I decided to check the facts from the Census Bureau records and hence this article. The plan is to do a cursory analysis of the available data in the public domain – and attempt to see how it informs this discussion. I intend this discussion to be a multi-part series.

Data Sources

Besides the decennial census records, the Census Bureau also conducts the American Community Surveys (ACS) every 5 years and provides 1 year, 3 year and 5 year estimates. The 5 years estimates covers the broadest range in terms of population. So I decided to pick three groups to compare: all racial and ethnic groups (i.e. the overall US population), Asians, and Asian Indians.

In Part 1 of this article, I am not examining time series data –  I am focusing on the current (or rather recent) situation.

Key Questions

In this part, I am focusing on the following questions:

  1. How does the median household income for Asian Indians compare to Asians and the United States as a whole?
  2. How does the per capita income for Asian Indians compare to Asians and the United States as a whole?
  3. What are the percentages of Indian households in various income groups? How do these percentages vary from Asian and the United States as a whole?

It may be worth mentioning that in my analyses, comparisons are made among Indians, Asians (and not Asians who are not Indians) and all of the United States (rather than Americans who are not Asians or Indians).


First, ACS data have a certain margin of error –  which is not always consistent among the groups compared. But for the intent and purpose of the analysis, I believe the margin of error is quite acceptable as long as it is acknowledged. Secondly, the data compared are a mix of 2010 and 2011 surveys, which, again, should not significantly impact the findings or the conslusions.


  1. Number of households [Table 1]: As of 2011, there were approximately 115 million households in the United States and Asians comprised almost 4% of those households. Asian Indian households comprise a fifth of all Asian households, which is slightly over three-quarters of a percent of all the households in the United States.
  2. Median household income [Table 1]: The median household income for Asian Indians, Asians and overall United States are respectively $88,000, $69,000 and $53,000. So median income for Asians is 30% higher than the median household income for overall United States and the median household income for Asian Indians is 28% higher than the median for all Asians.
  3. Per Capita Income [Table 1]: While the general variations in the median household income hold true for per capita income, the differences are less profound. The per capita incomes for Asian Indians, Asians and all Americans are $38,000, $30,000 and $28,000 respectively. In terms of percentages, the per capita income for Asians is 7.5% higher than the per capita income for overall United States and that of the Indians is 26% higher than that for Asians.
  4. Percentage of householders by household income range [Figure 1]: The general trend is very similar across the groups compared (i.e. Asian Indians, Asians and overall United States], at least up to a household income of $150,000.  Beyond that, Asian Indians show a sharp rise, Asians show a rise but not as sharp as Asian Indians, and the national data shows a slight drop. As far as percentage of households in the income ranges below $75,000, Asian Indians trail Asians who in turn trail the Nation. Almost two-thirds of the nation has household income below $75,000. For Asians, the percentage is about 54% and for Asian Indians 41 %. For every income range above $75,000, the percentages are highest for Asian Indians, followed by Asians.
  5. Median Income in different age groups [Figure 2]: Four age groups were compared: Less than 25; 25 to 44; 45 to 64; and over 64.  Except for the less than 25 year old householders, Indians led Asians and Asians led the Nation in median house hold income. Median income of Asian Indians exceeded the Nation’s by almost 93% for 65 and older population, by 58% in 25 to 44 age group and by 46% in the 45 to 64 age group. When compared to Asians, the median income of Asian Indians was 21-22% higher between 25 and 64 and almost 77% higher for the older than 64 age group.

Part 2 will focus on conclusions of these findings. If I get to Part 3, I will review historical census data and explore how theses trends have changed over time.  I appreciate any and all feedback.

Table 1. Number of Households, median Household Income and Per Capita Income Comparison

Asians Indians Asians v.
Indians v.
Indians v. Asians
 114,761,359    4,501,393 884,368 3.92% 0.77% 19.65%
Median Household
 $ 52,762  $ 68,950  $ 88,133 30.68% 67.04% 27.82%
Per Capita
 $ 27,915  $ 30,021  $ 37,931 7.5% 35.9% 26.3%

Figure 1: Percentage of householders by household income range [Click on figure to enlarge]


Figure 2: Median income by age group [Click on figure to enlarge]