Independent, objective, nonpartisan research
Press Release · May 21, 2002

Mexican Americans Earn Far Less Than Whites, Even After Three Generations

Lower Levels of Education Key to Income Disparity

SAN FRANCISCO, California, May 21, 2002 – Mexican Americans have not experienced the rapid economic progress enjoyed by previous immigrant groups and still earn significantly less than non-Hispanic whites even after three generations, according to a report released today by the Public Policy Institute of California (PPIC). The cause of this gap? Education. People of Mexican descent earn substantially less than other workers because they receive less schooling than almost all other racial and ethnic groups in the United States.

Mexican Americans constitute one of the most rapidly growing and economically disadvantaged groups in the nation. The study, Falling Behind or Moving Up? The Intergenerational Progress of Mexican Americans, uses several national data sets to compare the hourly earnings and education levels of whites, blacks, and three generations of Mexican Americans. Overall, authors Jeffrey Grogger and Stephen Trejo find that substantial education and wage gaps persist between U.S.-born Mexican Americans and other Americans. By the third generation, for example, Mexican Americans average about 25 percent lower wages and a year and a half less schooling than non-Hispanic whites.

Grogger, a professor of public policy at the University of California, Los Angeles, and Trejo, an associate professor of economics at the University of Texas, Austin, report that lower levels of education among Mexican Americans can explain much of the wage gap. Given the increased importance of education in today’s labor market, the surest path to increased earnings for Mexican Americans involves improving their schooling and narrowing their education gap relative to other Americans. Indeed, the study finds that the economic payoff to acquiring a high school diploma through an equivalency exam such as the GED is substantially higher for Mexican immigrants than for U.S.-born workers of any race/ethnicity. (Differences in wages between blacks and other groups are more difficult to explain and will be examined in a forthcoming PPIC report.)

“Slow economic progress by Mexican Americans is a serious public policy concern, especially in California, where more than 20 percent of the population is of Mexican descent,” says Grogger. “Finding a way to eliminate this educational disadvantage would go a long way toward bringing Mexican Americans into the economic mainstream.”

The Public Policy Institute of California is a private, nonprofit organization dedicated to objective, nonpartisan research on economic, social, and political issues that affect the lives of Californians. The Institute was established in 1994 with an endowment from William R. Hewlett. David W. Lyon is President and CEO of PPIC.