2012. Vol.2, No.2, 158-168
Published Online April 2012 in SciRes (http://www.SciRP.org/journal/sm) http://dx.doi.org/10.4236/sm.2012.22021
Copyright © 2012 SciRes.
Are Asian Americans Disadvantaged by Residing More in the West?
Migration, Region, and Earnings among Asian American Men
Isao Takei1, Arthur Sakamoto2, Daniel A. Powers2
1Department of International Relations, Nihon University, Mishima, Japan
2Department of Sociology, University of Texas, Austin, USA
Received January 23rd, 2012; revised February 26th, 2012; accepted March 28th, 2012
In studying labor market inequality of Asian Americans, the role of region and migration remain key fac-
tors that have not been much taken into account in the prior research. Using the 2003 National Survey of
College Graduates (NSCG), this study examines whether native-born and 1.5-generation Asian Ameri-
cans are more likely than whites to reside in the West. We also investigate whether native-born and
1.5-generation Asian Americans have higher earnings than whites when broken down by West versus
non-West. In addition to an OLS regression model, a switching regression model is used in order to ac-
count the possibility of sample selectivity between wages and region among men who are observed to re-
side in the West and in the non-West. This study can therefore ask, net of demographic and socioeco-
nomic factors and selectivity, if there is no differential in earnings between Asian Americans and whites
in the West, as well as in the non-West. The results of this study indicate that Asian Americans are more
likely than whites to currently reside in the West, regardless of age category and nativity. This study also
finds that Asian American men do not face a substantial disadvantage in the US labor market, net of
demographic and class factors. Finally, switching regression models demonstrate that both younger na-
tive-born and younger 1.5-generation Asian Americans in the West and 1.5-generation Asian Americans
in the non-West have significantly higher average earnings than whites, after further controlling for selec-
tivity. This indicates that the estimated earnings differentials for younger Asian Americans and whites are
obscured when using OLS, which does not account for selectivity. In regard to selectivity, there is a posi-
tive selection into living in the West, while the selection is negative living into the non-West.
Keywords: Asian Americans; Wages; Region; Switching Regression; 2003 National Survey of College
The Continui ng D ebate on the Disadvantage of Asian
Americans as a Minority in the Labor Market
A number of studies show that Asian Americans faced direct
and overt racial discrimination in the labor market before
World War II (e.g., Bonacich, 1972, 1973; Bonacich & Modell,
1980; Boswell, 1986; Chin, 2005; Ichihashi, 1932; Ichioka,
1988; Jiobu, 1988; Kitano, 1976; Kitano & Daniels, 2001; Le-
vine & Montero, 1973; Lieberson, 1980; Lyman, 1974; Makabe,
1981; McLemore, 1994; Okihiro, 1994).
Some research argues that labor market discrimination
against this racial group persists during the period after World
War II, and that their socioeconomic attainments are greatly
exaggerated. The seminal citation in this literature is Hirschman
and Wong (1984: p. 584) who conclude that “Asian Americans
approach socioeconomic parity with whites because of their
overachievement in educational attainment”. Hirschman and
Wong (1984) note that the average earnings and occupational
attainments of Asian Americans did not differ very much from
those of whites at least in the data that they studied. However,
because Asian Americans tend to have higher educational at-
tainments, the labor market can be construed to be discriminat-
ing against them in that they must make a higher investment in
human capital in order to obtain the same socioeconomic re-
wards as whites. The over-education view is supported by other
studies (e.g., Barringer, Takeuchi, & Xenos, 1990; Chin et al.,
1996; Feagin & Feagin, 1993; Fong, 1998; Kao, 1995; Marti-
nelli & Nagasawa, 1987; McCall, 2001; Min, 1995; Takaki,
1998; Waters & Eschbach, 1995; Wong, 1982; Wong et al.,
1998; Zhou & Kamo, 1994), collectively suggesting continuing
labor market discrimination against Asian Americans in the
post-World War II era, given this group’s high level of education.
Several more recent studies also support the over-education
view. For example, using data from the 1970, 1980, and 1990
PUMS, Hirschman and Snipp (2001) find that Asian American
men (i.e., Chinese and Japanese) are equal to or above white
men in their occupational positions measured in terms of the
Duncan Socioeconomic Index, but that Filipino men hold
slightly lower jobs than whites. Hirschman and Snipp (2001)
note that the reason for the higher occupational attainment of
Asian American men is simply their educational level—if the
Asian American men had the same education as white men,
there would be only modest racial occupational differences.
Furthermore, the authors find that Chinese and Filipino men
earn less than whites, although this gap is somewhat less than
blacks, American Indians, and Hispanics. Hirschman and Snipp
(2001) conclude that these results—the persistence of race and
ethnic differentials in late twentieth-century America—chal-
lenge conventional theories about the declining significance of
race in the US stratification system (also see Snipp & Hirsch-
I. TAKEI ET AL.
However, empirical findings about Asian American labor
market disadvantage seem to be affected by types of data em-
ployed for the analysis. For example, much of the previous
research supporting the over-education view (e.g., Hirschman
& Snipp, 2001; Snipp & Hirschman, 2004) includes the first-
generation (i.e., foreign-born) Asian Americans in the analysis,
who may face reduced labor market opportunities for various
reasons other than discrimination in the labor market. For ex-
ample, prior research argues that higher education attained
abroad may be undervalued by American employers who are
generally unfamiliar with foreign universities (Bratsberg &
Ragan, 2002; Zeng & Xie, 2004). In addition, immigrants may
have limited English-language skills, and be less familiar with
American labor market practices and institutions (Espenshade
& Fu, 1997; Sakamoto, Goyette, & Kim, 2009). The inequality
deriving from immigrant-status related resources, which gener-
ally affect one’s labor market competitiveness, should not be
confused with racial discrimination.
Indeed, most studies of native-born Asian Americans using
recent data (i.e., after 1990) do not find that they face any sub-
stantial and systematic disadvantage in terms of wages and
earnings in the contemporary labor market, when controlling
for highest educational level completed and other basic demo-
graphic variables (Chiswick, 1983; Iceland, 1999; Kim & Mar,
2007; Ko & Clogg, 1989; Sakamoto & Furuichi, 1997, 2002;
Sakamoto & Kim, 2003; Sakamoto, Liu, & Tzeng, 1998; Sa-
kamoto, Wu, & Tzeng, 2000; Sakamoto, Takei, & Woo, 2011;
Xie & Goyette, 2004; Zeng & Xie, 2004). This general conclu-
sion seems to apply not only to Asian Americans as a racial
category but also to particular ethnic groups such as Asian In-
dians (Woo, Sakamoto, & Takei, 2012) as well as Cambodians,
Hmong, Laotians, and Vietnamese (Sakamoto & Woo, 2007).
Furthermore, prior research (e.g., Barringer, Gardner, &
Levin, 1993; Sakamoto & Xie, 2006; Xie & Goyette, 2004)
demonstrates that Asian Americans as a whole (especially
among the native-born) tend to have higher mean values on
most indicators of socioeconomic status (e.g., education, in-
comes, hourly wages, and employment in professional and
technical occupations), and that they are not disadvantaged in
labor market stratification processes (Fang, 1996; Farley &
Alba, 2002; Iceland, 1999; Ko & Clogg, 1989; Montero, 1980;
Sakamoto & Xie, 2006; Xie & Goyette, 2004; Zeng & Xie,
2004). This general pattern in part derives from having parents
who tend to have higher levels of educational attainment them-
selves (Sakamoto & Xie, 2006). Such research collectively
suggests that net of education and basic demographic charac-
teristics, there is no significant differential in the socioeco-
nomic attainments between Asian Americans and non-Hispanic
whites. Namely, it is argued that the racial differentials are
mostly explained by and depend upon class characteristics and
The Role of Region in Asian American Labor Market
The literature review introduced above shows that the extent
to which Asian Americans face discrimination in the labor
market is a subject of considerable debate. In examining this
debate, region of residence and migration play important roles
(Mar, 1999). Compared to non-Hispanic whites, Asian Ameri-
cans tend to have a different regional distribution and their tra-
ditional residential states (i.e., California, Washington, Hawaii,
New York and New Jersey) tend to have a high cost of living.
Cabezas and Kawaguchi (1988) argue that the seeming parity
between Asian Americans and non-Hispanic whites is merely
an artifact of regional location. Regional distribution of Asian
Americans is most characterized by their concentration in cer-
tain states and regions, such as Hawaii, California, and the
West Coast, primarily due to the fact that these were the places
of residence after arrival from abroad of the earlier immigrants
(Allen & Turner, 1988; Barringer, Gardner, & Levin, 1993;
Hurh & Kim, 1989; Lyman, 1977). Since Asian Americans are
primarily concentrated in the high wage/high cost of living
western United States (Hurh & Kim, 1989; Takaki, 1998; US
Commission on Civil Rights, 1988), especially in cities rather
than rural areas (Takaki, 1998), it is argued that the unadjusted
average US earnings comparisons between Asian Americans
and non-Hispanic whites are inappropriate comparisons of eco-
nomic progress (Mar, 1999).
Indeed, prior research shows that Asian Americans are ad-
versely affected by their place of residence. Using data from the
1970, 1980, and 1990 PUMS, Snipp and Hirschman (2004: p.
110) note that, “[i]nterestingly, unlike other minorities, Asian
men residing in areas with large populations of co-ethnics,
namely California and Hawaii, have occupational statuses
which are slightly lower than Asian men living elsewhere. In
the absence of this liability, the occupational statuses of Japa-
nese and Chinese men in California and Hawaii would be an
average of 1 to 6 points higher.” Therefore, Snipp and Hirsch-
man (2004: p. 115) conclude that “at least Asian American men
are disadvantaged by their geographic concentrations.” Using
1990 PUMS, Mar (1999) examines the role of location in the
earnings discrimination of three groups of Asian Americans:
Japanese, Chinese, and Filipinos. Mar’s (1999) findings from
the regional comparisons of earnings differentials by race sug-
gest that Asian American (i.e., Chinese and Japanese) men en-
counter less labor market discrimination in Hawaii than in
California. In particular, Mar (1999) finds that earnings for
Filipino men are significantly lower than non-Hispanic whites
in California once differences in human capital are taken into
account. Fuji and Mak (1985) find that Filipino men have lower
returns to education in Hawaii than the rest of the United States.
Furthermore, when controlling for field of study and college
type among college graduates, Kim and Sakamoto (2008) find
that also controlling for region of residence results in a net dis-
advantage of about 8 percent for native born Asian American
men. Kim and Sakamoto (2008) note that, to the extent that
region of residence should be considered to be a necessary con-
trol variable, then college-educated native born Asian American
men have yet to reach full wage parity with whites.
Although Asian Americans tend to live in high wage/high
cost of living regions and states, this may not derive from a lack
of labor market opportunities nationally. Rather, this may be
due to personal proclivities and family ties that are associated
with being more likely to have previously lived in those areas.
In keeping with traditional Asian cultural norms, Asian Ameri-
cans may be more concerned than are whites with residing near
or with aging parents (Kamo, 2000; Xie & Goyette, 2004).
Asian Americans as a group have been characterized as being
more family oriented in the sense of being more likely to marry
after completing schooling, less likely to become divorced,
more likely to focus on the schooling achievements and related
childrearing activities of their children, and more likely to form
three-generational families (Kamo, 2000; Min, 1995; Sun, 1998;
Copyright © 2012 SciRes. 159
I. TAKEI ET AL.
Xie & Goyette, 2004). Some evidence accordingly suggests that,
despite being younger on average, Asian Americans have
higher levels of home equity than non-Hispanic whites (Krivo
& Kaufman, 2004) in part due to the preference for larger
homes. Because of this Asian American sub-cultural context
that places a premium on family functioning, Asian Americans
may not maximize their cost-adjusted earnings to the same
extent that non-Hispanic whites do, but their residence may not
derive from a lack of labor market opportunities nationally but
rather may reflect the tendency of Asian Americans to prefer to
live in places such as California despite the higher costs (Sa-
kamoto, Kim, & Takei, 2008). In sum, region of residence
probably entails a higher cost of living for Asian Americans
than non-Hispanic whites, but the extent to which this pattern
may be interpreted as deriving from racial and ethnic discrimi-
nation in the labor market requires further investigation.
Indeed, while the nearly majority Asian Americans still pre-
fers to live in California and some other traditional residential
states, an increasing size of Asian American population, espe-
cially recent immigrants, do not live in their traditional residen-
tial region of the West and reside in all geographic areas of the
nation, especially to the South (Barringer, Gardner, & Levin,
1993; Sakamoto, Kim, & Takei, 2008). Although the vast ma-
jority of Asian Americans were concentrated in the West prior
to the twenty-first century, most Asian Americans now live
outside of the West (i.e., in the South, Midwest or Northeast)
(Sakamoto, Kim, & Takei, 2008). The South has recently over-
taken the Northeast as the region with the second largest popu-
lation of Asian Americans (Sakamoto, Kim, & Takei, 2008).
Although Asian Americans may have greater preferences for
living in high-cost areas such as California, contemporary
American society is characterized by a high degree of geo-
graphic mobility particularly among the college educated (Far-
ley, 1996) who are disproportionately Asian American. Work-
ers may be increasingly locating to places where the combina-
tion of labor market opportunities, regional characteristics, and
cost of living most suit their preferences. Region of residence in
the contemporary labor market may thus no longer resemble a
prelabor market factor. Indeed, larger proportion of native-born
(i.e., a smaller proportion of foreign born) Asian Americans
reside in the West (Sakamoto, Kim, & Takei, 2008). As sug-
gested by Sakamoto, Kim, and Takei (2008), Asian Americans
are entering into the social and geographic mainstreams of
American society by successfully competing for its better jobs
in all areas of the nation.
The selectivity of contemporary Asian Americans in non-
traditional region is documented in Sakamoto, Kim, and Takei
(2008) who investigate current demographic characteristics of
Asian Americans in the South. The authors find that Asian Ameri-
cans, especially recent immigrants, are more likely than non-
Hispanic whites to migrate to the region. In contrast to the ra-
cial differentials in other regions, Asian Americans in the South
have notably higher levels of education and hourly wages than
non-Hispanic whites in the South. When compared to Asian
Americans in other regions, Asian Americans in the South have
higher levels of education, hourly wages, and employment in
professional and technical occupations. After adjusting for re-
gional differentials in the cost of living, Asian Americans in the
South have higher levels of earnings, household income, and
per-capita household income than Asian Americans in other
regions. Overall, Sakamoto, Kim, and Takei (2008) interpret
these results as suggesting the beginning of a new stage of
Asian American history which is characterized by improved
socioeconomic opportunities that are facilitating a movement
away from the geographic margins of the nation such as Hawaii
Data and Methods
We use data from the 2003 National Survey of College
Graduates (NSCG). The sampling frame for this survey is na-
tionally representative of all persons who responded in the 2000
U.S. Census that they had a college degree. The NSCG is a
probability sample from that sampling frame and is representa-
tive of the college-educated population in 2000. The NSCG
includes information on the field of study of the highest degree
obtained as well as earnings and basic demographic character-
istics. It is the most recent micro-data on field of study that are
available for the U.S.
Regarding educational attainment, some highly informative
data are provided by the 2003 NSCG. Investigating and con-
trolling for the effects of educational attainment is important
because recent studies suggest that the level of one’s completed
schooling is increasingly significant in explaining wage ine-
quality (Becker & Murphy, 2007; Kim & Sakamoto, 2008). For
example, field of study has become another important dimen-
sion of educational attainment that affects wages (Card & Di-
Nardo, 2002; Kim & Sakamoto, 2008). Scientific, technical,
engineering and math degrees (i.e., STEM) are well known to
yield higher labor market rewards than degrees in the social
sciences, humanities, and fine arts (Card & DiNardo, 2002;
Kim & Sakamoto, 2008; Song & Glick, 2004). Because Asian
Americans are well known to be much more likely to complete
college (Sakamoto & Xie, 2006; Sakamoto, Goyette, & Kim,
2009; Xie & Goyette, 2004) as well as to be much more likely
specialize in STEM fields (Goyette & Xie, 1999; Kim & Sa-
kamoto, 2008; Sakamoto, Goyette, & Kim, 2009; Simpson,
2001; Xie & Goyette, 2003;), investigating the various effects
of educational attainment is particularly apropos for evaluating
the earnings of Asian Americans and the issue of whether they
have achieved parity relative to whites.
Another dimension of educational attainment is the prestige
of the college or university that one attended. There is some
evidence that Asian Americans are more likely to obtain their
college degrees from higher status institutions (Sakamoto,
Goyette, & Kim, 2009). Although highly imprecise, informa-
tion regarding college prestige can be inferred from the Carne-
gie classification of the institution that awarded the degree,
which is provided by the 2003 NSCG. Using the 2003 NSCG
therefore enables our analysis to obtain more informative re-
sults about the extent to which Asian Americans are obtaining
equivalent labor market rewards (in comparison with whites) on
their various dimensions of educational attainment including
In order to ensure that our sample includes persons with
some clear attachment to labor force participation, we limit the
analysis to persons with positive earnings who were between
the ages of 25 to 64, and who were working at least 1000 hours
during the year prior to the surveys. This restriction ensures that
only workers with some definite attachment to the labor force
are included in the analysis. Note that persons who worked
1000 hours during the year prior to the survey include full-time
workers who were employed half the year as well as part-time
workers who were employed year round. The target population
Copyright © 2012 SciRes.
I. TAKEI ET AL.
is also restricted to those with positive earnings because nega-
tive values tend to be associated with problems in the meas-
urement of earnings for self-employed persons.
The analysis differentiates Asian Americans in terms of those
who were born overseas but who came to the US before the age
of 13 in the US (whom we have referred to as the 1.5 genera-
tion as is commonly done in the literature on Asian Americans)
and native-born generations among Asian Americans. This
distinction is made because the 1.5 generation may perhaps be
regionally more mobile as well as somewhat distinctive in the
wage determination patterns as they are the children of immi-
grants who tend to be more motivated (Sakamoto, Goyette, &
Kim, 2009). Nevertheless, the difference between the 1.5 and
the native born is not really very clear from prior research, be-
cause the former are perfectly fluent in English and familiar
with American culture. Furthermore, most native born Asian
Americans are second generation and are thus also the children
of immigrants. Accordingly, the following analysis will give us
better information about any differences (if there are any) be-
tween 1.5- and native born Asian Americans in terms of their
migration and earnings.
For simplicity and to avoid excessive length, we focus on
men only. Women’s migratory processes may be further com-
plicated due to the even greater influences of spousal and fam-
ily relations. For example, McKinnish (2008) finds that the
earnings returns to migration are typically much larger for mar-
ried men than for married women. For married women, the
earnings returns to migration are actually often negative in that
this group is much more likely (though not always) to be the
“trailing spouse” in households where the maximization of the
career development of the husband is given priority (Cooke et
The dependent variable that we analyze is log-earnings. The
multiple regression functions that we estimate include di-
chotomous variables to indicate the racial minority group (i.e.,
1.5-generation Asian Americans and native-born Asian Ameri-
cans) with native-born non-Hispanic whites serving as the ref-
erence category. An additional dichotomous variable that we
use is birth in the Pacific Division of the West (i.e., Washington,
Oregon, California, Alaska, and Hawaii) because persons from
California may have a greater proclivity to reside in California
and because native-born Asian Americans are much more likely
to be born in the state (Sakamoto, Kim, & Takei, 2008).
Other demographic variables include years of age, marital
status, and the number of children which are associated with
migration preferences. The following discrete count variables
indicate the number of children that reside in the respondent’s
household—under age 2; between ages 2 - 5, between ages 6 -
11; and between ages 12 - 18. The analysis also includes two
dichotomous variables to indicate the highest level of education
completed (i.e., master’s degree and doctoral degree including
professional degree versus bachelor’s degree as the reference
The regression functions further control for the major field of
study of the highest degree obtained (i.e., mathematics, life
sciences, physical sciences, engineering, business, business fi-
nance, education, medicine and pharmacy, and legal studies or
law) with the reference category being social sciences, medical
sciences, humanities, visual or performing arts, communica-
tions, and majors reported as “other”. Furthermore, the Carne-
gie classification for the college awarding the highest degree is
indicated by dichotomous variables for Research University I,
Research University II, Doctorate Granting I, Doctorate Grant-
ing II, Comprehensive I, and Liberal Arts I. The reference cate-
gory includes Comprehensive II, two-year institutions, Liberal
Arts II, Theological Seminars and Bible Colleges, Medical
Schools and Medical Centers, Schools of Engineering and
Technology, Schools of Art, Music, and Design, Schools of
Law, a few other highly specialized institutions, and classifica-
tions reported as “missing.”
This study examines whether native-born and 1.5-generation
Asian Americans are more likely than whites to reside in the
West. We also investigate whether native-born and 1.5-gene-
raiton Asian Americans have higher earnings than whites when
broken down by West versus non-West. In addition to an OLS
regression model, a switching regression model is used in order
to account the possibility of sample selectivity between wages
and region among men who are observed to reside in the West
and in the non-West. This study can therefore ask, net of age,
education, marital status, disability status, and selectivity, if
there is no differential in earnings between Asian Americans
and whites in the West, as well as in the non-West. We also
examine whether the results differ across OLS and switching
regression models which allow for selectivity in region of resi-
The switching regression model consists of three equations
that are estimated simultaneously using maximum likelihood
assuming trivariate normality between the error terms of these
equations. In this approach, selectivity is empirically evident to
the extent that the error term from the probit equation is corre-
lated with the error for either of the two log-earnings regres-
sions. In this case, men who are observed to currently reside in
the West (or are observed not to currently reside in the West)
have systematically different earnings than would a random
sample of working-age men with the same values on the inde-
pendent variables that were used as covariates in the log-earnings
regression. The absence of any statistically significant correla-
tion between the error terms indicates a lack of empirical evi-
dence for selectivity between current residence in the West and
earnings. In this latter case, OLS estimates are adequate to ob-
tain unbiased estimates of these population-level relationships.
Due to the complexity of estimating these models which are not
based on closed-form solutions (as in OLS), proper specifica-
tion of the regression model (e.g., including all of the relevant
independent variables) is very useful to obtaining appropriate
results. For this reason, we do not formally consider shorter
model specifications such as a bivariate model.
Switching Regression Models
The particular approach that we investigate is an endogenous
switching regression model with two behavioral regimes (i.e.,
one log-earnings regression for residence in the West and an-
other log-earnings regression for residence in the non-West).
Since the technical details of this model have been discussed
elsewhere (Gamoran & Mare, 1989; Maddala, 1983; Mare &
Winship, 1988), only its basic points are summarized here.
The model consists of three equations: an earnings regression
for each of the two regional outcomes (i.e., whether or not cur-
rently reside in the West), and a probit equation predicting the
individual’s regional residence outcome (i.e., the ith person’s
Copyright © 2012 SciRes. 161
I. TAKEI ET AL.
probability of residing in the West). The three equations are
estimated simultaneously by maximum likelihood assuming
that the error terms for the three equations may be correlated
and follow a trivariate normal distribution.
Let Z* denote the propensity to reside in the West, and as-
sume that this variable is latent with the following index func-
such that Z = 1 if Z* > 0, Z = 0 otherwise. If Z = 1 then the per-
son is observed to reside in the West while if Z = 0 then the
person is observed to be residing outside of the West. Two
more equations may now be defined as follows:
β if 1YXu Z (2)
β if 0YXu Z
We observe Y1 when Z = 1 because Equation (2) refers to the
wages of persons who reside in the West. For these men resid-
ing in the West, Y0 is unobserved, latent, or missing (i.e., we do
not observe what the wages of men currently residing in the
West would have been had they decided not to reside in the
West). Similarly, we observe Y0 when Z = 0 which refers to the
wages of those who reside in the non-West. For these latter men
Y1 is missing (i.e., we do not observe what the wages of non-
West residents would have been had they decided to reside in
the West). This model is known as an endogenous switching
As mentioned above, we use this model to address issues of
self selection and the estimation of effects when there is non-
random allocation of men in regard to current residence in the
West net of measured covariates. Because of the selection
problem (the failure to observe Y0 when Z = 1 and the failure to
observe Y1 when Z = 0), we need to consider these outcomes in
terms of this switching regression approach. For the men who
are observed to currently reside in the West or who have, in
other words, self-selected into current residence in the West,
mean wages may be derived as being given by:
|1|* 0|γ 0
EY ZEY ZEYXυ
which follows due to the truncation of the distribution of Y1
from below. Note that σ1υ refers to the covariance between the
error term of the current region equation and the error term of
the current residence in the West equation. Similarly, mean
wages for non-West residence or in other words, those who
have self-selected into not currently reside in the West is given
EY ZEY ZEYX
which follows from truncation of Y0’s distribution from above.
In this case, σ0υ refers to the covariance between the error term
of the West residence equation and the error term of the
non-West residence equation.
This switching regression model allows for the possibility
that error terms are correlated which occurs to the extent that
σ1υ and σ0υ are non-zero. In this case, OLS estimates are biased
due to sample selection (e.g., Falaris, 1988). Falaris (1988: p.
515) notes in that “[i]f unobserved characteristics of individuals
affect both their choice of location and their wages, and if we
use OLS to estimate location-specific wage equations to be
used in obtaining predicted wages, these wages equations may
suffer from sample selection bias.” The switching regression
approach allows for the possibility of sample selection and thus
provides more informative results than can be obtained by only
This model does not, however, assume that sample selectiv-
ity is necessarily present. Instead, we can empirically test for
sample selection bias by assessing whether the correlation be-
tween the error terms of the current residential region regres-
sion and either log-earnings regression is not zero. If the em-
pirical results indicate that we cannot reject the hypotheses that
σ1υ = 0 and σ0υ = 0, then we can actually go back to using OLS
to obtain unbiased estimates because in this particular case
there is no evidence for sample selection. On the other hand, if
the empirical results indicate that either σ1υ or σ0υ are not equal
to zero, then the estimation procedure needs to take into ac-
count these non-zero correlations in order to correct for selec-
tivity which would rule out the use of OLS.
Table 1 presents descriptive findings separately for the three
age groups (age 25 - 35, 36 - 49, and 50 - 64). The table shows
that while younger whites tend to have higher percentages with
children than Asian Americans, elder Asian Americans tend to
have higher percentages with children than whites. In regard to
birth region, higher percentages of Asian Americans are found
in the Pacific Division of the West (i.e., Washington, Oregon,
California, Alaska, and Hawaii), while higher percentages of
whites are found in the Northeast, Midwest, and South, across
the age groups. It has to be noted, however, that the sampled
Asian American population includes 1.5-generation people who
were born overseas.
There are also some important racial differentials in educa-
tional attainment, college major, and school type. For example,
while a higher percentage of whites tend to have college educa-
tion, a higher percentage of Asian Americans tend to have doc-
toral or professional degrees. This is more apparent among the
younger and middle-aged groups. Regarding college majors, a
higher percentage of Asian Americans tend to major in mathe-
matics, engineering, and medicine and pharmacy, while a
higher percentage of whites tend to major in business and edu-
cation. In regard to school type, Asian Americans are more
likely to select Research University I, while whites tend to
choose Research University II and Doctoral Granting I. Finally,
the descriptive findings show that whites tend to have higher
average salary than Asian Americans across age groups. Nev-
ertheless, it should be noted that the Asian population includes
the 1.5-generation, who may experience lower levels of salary
due to other reasons than labor market discrimination, such as
lack of English ability and unfamiliarity with the U.S. labor
market and culture. We will later examine the net effects of
Copyright © 2012 SciRes.
I. TAKEI ET AL.
Copyright © 2012 SciRes. 163
Descriptive statistics for Non-Hispanic Whites and Asian Americans.
White Asian Non-Hispanic
White Asian Non-Hispanic
25 - 35 36 - 49 50 - 64
Mean Std. Dev. Mean Std. Dev.Mean Std. Dev.Mean Std. Dev.Mean Std. Dev. Mean Std. Dev.
Age 31.403 2.638 31.027 2.749 42.749 3.944 41.911 3.982 55.513 3.894 54.449 3.702
Age-Squared 993.105 163.340 970.230169.3601843.061336.4271772.379337.1673096.861 438.816 2978.321413.592
Married 0.732 0.443 0.557 0.497 0.849 0.358 0.803 0.398 0.863 0.344 0.830 0.376
Children under Age 2 0.298 0.501 0.192 0.417 0.105 0.334 0.146 0.377 0.011 0.132 0.019 0.138
Children Aged 2 - 5 0.325 0.592 0.188 0.467 0.280 0.553 0.373 0.603 0.020 0.166 0.035 0.201
Children Aged 6 - 11 0.159 0.468 0.089 0.361 0.584 0.812 0.521 0.752 0.088 0.345 0.167 0.479
Children Aged 12 - 18 0.027 0.202 0.012 0.129 0.554 0.840 0.316 0.661 0.311 0.636 0.388 0.708
Disability Status 0.023 0.149 0.019 0.138 0.050 0.217 0.040 0.195 0.103 0.304 0.112 0.316
Born in Northeast 0.261 0.439 0.130 0.337 0.285 0.451 0.070 0.255 0.297 0.457 0.064 0.245
Born in Midwest 0.349 0.477 0.097 0.296 0.337 0.473 0.061 0.240 0.330 0.470 0.058 0.234
(Born in South) 0.238 0.426 0.074 0.261 0.227 0.419 0.044 0.206 0.233 0.423 0.035 0.185
Born in Non-Pacific Division of the West 0.052 0.222 0.013 0.113 0.048 0.214 0.018 0.133 0.043 0.202 0.038 0.193
Born in Pacific Division of the West 0.100 0.300 0.151 0.358 0.102 0.303 0.295 0.456 0.097 0.296 0.510 0.501
(College Degree) 0.686 0.464 0.565 0.496 0.607 0.489 0.567 0.496 0.495 0.500 0.529 0.500
Master’s Degree 0.215 0.411 0.266 0.442 0.258 0.438 0.252 0.434 0.307 0.461 0.263 0.441
Doctoral and Professional Degree 0.060 0.238 0.123 0.328 0.074 0.261 0.106 0.308 0.092 0.289 0.109 0.312
Major Degree Field
Mathematics 0.083 0.277 0.108 0.311 0.083 0.275 0.103 0.304 0.051 0.219 0.035 0.185
Life Sciences 0.060 0.237 0.058 0.234 0.052 0.223 0.055 0.229 0.056 0.230 0.087 0.282
Physical Sciences 0.040 0.196 0.025 0.155 0.042 0.201 0.028 0.164 0.043 0.202 0.029 0.168
Engineering 0.249 0.432 0.295 0.457 0.240 0.427 0.306 0.461 0.171 0.376 0.218 0.414
Business 0.120 0.325 0.090 0.287 0.150 0.358 0.130 0.336 0.138 0.345 0.135 0.342
Business Finance 0.046 0.209 0.040 0.196 0.050 0.218 0.046 0.209 0.041 0.197 0.061 0.240
Education 0.050 0.218 0.021 0.142 0.050 0.218 0.018 0.133 0.098 0.298 0.048 0.214
Medicine and Pharmacy 0.029 0.166 0.084 0.277 0.039 0.194 0.064 0.244 0.050 0.218 0.061 0.240
Legal Studies 0.031 0.174 0.027 0.162 0.032 0.176 0.029 0.167 0.040 0.196 0.038 0.193
Research University I 0.343 0.475 0.476 0.500 0.333 0.471 0.445 0.497 0.355 0.479 0.506 0.501
Research University II 0.110 0.313 0.066 0.248 0.103 0.303 0.073 0.261 0.100 0.300 0.054 0.227
Doctorate Granting I 0.076 0.265 0.054 0.227 0.076 0.266 0.031 0.174 0.073 0.260 0.032 0.176
Doctorate Granting II 0.070 0.255 0.059 0.236 0.077 0.266 0.062 0.242 0.066 0.248 0.061 0.240
Comprehensive I 0.226 0.418 0.195 0.396 0.229 0.420 0.244 0.430 0.238 0.426 0.205 0.404
Liberal Arts I 0.029 0.168 0.017 0.129 0.022 0.148 0.001 0.035 0.021 0.144 0.010 0.098
Salary 63,664 40,402 73,079 49,817 86,523 63,579 88,086 59,890 87,651 70,072 85,150 43,527
Log-Salary 10.909 0.626 11.014 0.795 11.180 0.683 11.217 0.626 11.141 0.785 11.212 0.591
Sample Size 5824 775 12,573 833 10,808 312
Variables in parentheses are omitted categories used in regression models.
I. TAKEI ET AL.
Asian Americans in terms of salary, net of socioeconomic and
demographic factors and selectivity.
Table 2 presents the estimates of probit model which comes
from the selection equation, predicting whether or not a work-
ing-age man is observed to currently reside in the West. Table
2 also presents sample sizes of Asian Americans and whites by
three age groups. The analysis is separately conducted by dif-
ferent age categories, because age is usually a significant factor
affecting wages especially in the case of men. Table 2 shows
that the great majority of the sampled observations (i.e., 93
percent) are whites, and that whites are the majority across the
three age groups (87 percent of the younger; 93 percent of the
middle-aged; and 97 percent of the older). Therefore, the find-
ings on selectivity which are discussed below are largely attrib-
uted to the characteristics of whites, rather than those of Asian
Results show that Asian Americans are more likely than
whites to currently reside in the West, regardless of age cate-
gory and nativity. One might hypothesize that 1.5-generation
Asian Americans are less likely than whites to live in the West,
because their parents are recent immigrants who are more likely
to live in other regions with lower cost of living. Nevertheless,
findings from the probit model indicate that 1.5-generation
Asian Americans are also more likely than whites to reside in
The probit model also includes four dummy variables indi-
cating one’s birth region (i.e., the Northeast, Midwest, Western
Pacific Division, and Western non-Pacific Division, with the
South serving as the reference category). The results show that
men who were born in the Midwest, Western Pacific Division,
and Western non-Pacific Division are more likely than those
who were born in the South to currently reside in the West.
However, there is no statistically significant differential in
the probability of currently residing in the West, between men
who were born in the Northwest and those who were born in
the South. As such, findings suggest that migration into the
West is common among men who were born outside of this
area, except the Northeast.
Table 3 presents estimates of OLS and switching regression
models for log-salary. For simplicity, only the coefficients for
native-born and 1.5-generation Asian Americans across the
regions (i.e., current region is in the West or not) for each age
category are presented. However, the results were obtained net
of age, marital status, disability status, education, college major,
and college type.
It has to be noted first that the correlations (rho) on the last
column of Table 3 indicate whether we can refer to the results
from OLS or should refer to those from switching regression
models. The statistically significant correlations (rho) for the
West indicate a positive selection into living in the West (i.e.,
Asian Americans and whites are more likely to earn if they
currently reside in the West). On the other hand, the statistically
significant correlations for the non-West indicate a negative
selection into living in the non-West (i.e., Asian Americans and
whites are less likely to earn if they currently reside in the
West). It should be noted that, since the great majority of the
Estimates of probit model for residing in the West.
Age 25 - 35 Age 36 - 49 Age 50 - 64 Age 25 - 64
Native-Born AA 0.333* (n = 360) 0.551* (n = 407) 0.603* (n = 220) 0.514* (n = 987)
1.5-Gen. AA 1.007* (n = 415) 0.990* (n = 426) 1.296* (n = 92) 1.119* (n = 933)
Born in the Northeast 0.010* –0.073* 0.043* 0.003*
Born in Midwest 0.183* 0.180* 0.296* 0.230*
Born in Pacific Division 1.443* 1.872* 1.904* 1.902*
Born in Non-Pacific Divis 1.434* 1.866* 1.853* 1.864*
Sample size for Whites 5824* 12,573* 10,808* 29,205*
Note: The model controls for age, marital status, number of children, educational level, college major, and college type. *p < 0.001.
OLS and switching regression models of log-salary.
OLS Switching Regression
Age Group Current Region Native-Born AA 1.5-Gen. AA Native-Born AA 1.5-Gen. AA rho
All Ages (25 - 64) West –0.002 0.062 0.013 0.065 0.035
Non-West –0.075* 0.077** –0.078* 0.074* –0.011
Younger (25 - 35) West 0.116* 0.111* 0.140** 0.122* 0.803***
Non-West –0.073 0.142** 0.076 0.359** 0.110*
Middle-Aged (36 - 49) West –0.063 –0.008 –0.038 –0.005 0.061*
Non-West –0.011 0.017 –0.009 0.019 0.007
Older (50 - 64) West 0.019 0.105 0.015 0.104 –0.007
Non-West –0.089 0.052 –0.102 0.040 –0.032
Note: The models control for age, education, marital status, disability, college major, and college type. *p < 0.05; **p < 0.01; ***p < 0.001.
Copyright © 2012 SciRes.
I. TAKEI ET AL.
sampled population is whites, these two different types of se-
lectivity largely derive from the sampled white population.
Since correlations for the older are not statistically significant,
it is assumed that we can refer to the results from OLS for this
age group. Namely, we can assume that there is no selectivity
(e.g., men who reside in the West have more earnings) for this
age group. The regression results for elder people indicate that
there is no significant differential in earnings between Asian
Americans and whites, regardless of nativity and current resi-
The results for all ages indicate that salaries for both na-
tive-born and 1.5-generation Asian Americans in the West do
not significantly differ from those of whites in the West. In the
non-West, native-born Asian Americans have 7 percent (i.e.,
e–0.075 – 1) lower earnings while 1.5-generation Asian Ameri-
cans have 8 percent (i.e., e0.077 – 1) higher earnings than whites,
net of other variables. As such, for all ages and older group,
there is a lack of empirical evidence for selectivity between
current residence in the West and earnings.
On the other hand, the statistically significant correlations
(rho) for the younger group indicate that we should refer to the
findings from switching regression models rather than those of
OLS, because error terms are correlated in the selection equa-
tion. First, it has to be noted that the coefficients for Asian
Americans in this age group are statistically significant and
positive, except for the native-born in the non-West. Namely,
the results show that both in the West and non-West, both na-
tive-born and 1.5-generation Asian Americans aged 25 - 35
have significantly higher earnings (i.e., e0.140 – 1 or 15 percent
higher earnings for native-born Asian Americans in the West;
e0.122 – 1 or 13 percent higher earnings for 1.5-generation Asian
Americans in the West; and e0.359 – 1 or 43 percent higher earn-
ings for 1.5-generation Asian Americans in the non-West;) than
whites after taking into account other variables and selectivity.
Namely, the results indicate a positive advantage in earnings for
Asian Americans both in the West and non-West, except for the
native-born in the non-West.
A significant positive selectivity is also found in the mid-
dle-aged Asian Americans living in the West. Although the
regression coefficients per se are not statistically significant, the
correlation (rho) for the West (r = 0.061) indicates a significant
positive selection into living in the West for Asian Americans
and whites who are aged 36 - 49. Yet, the switching regression
coefficients do not indicate any significant differential in sala-
ries across Asian Americans and whites.
Selectivity is an additional effect that is contained in the error
term. It may indicate motivation, personality, and competitive-
ness that are positively correlated with one’s labor market out-
comes. However, the switching regression model does not en-
able us to identify any specific components. Some speculations
are that, Asian Americans and whites who currently reside in
the West (especially California) are more advantaged because
they have to stay productive in their work performance so that
they can remain in California where many workers have a pref-
erence reside due to its desirable features including good
weather and other regional amenities. Or California residents
are more eager to take higher-paying jobs to manage high rents
and property taxes to remain in the state. Again, however, this
positive selection residing in the West largely derives from
characteristics of the white population in NSCG. Unfortunately,
we cannot tell the extent to which this observed positive selec-
tion of living in the West holds for Asian Americans.
On the other hand, Asian Americans and whites in the non-
West appear to be less competitive. Yet, again, this negative
selection into living into the West largely derives from the
white population. It might be possible, for example, to argue
that Asian Americans in the non-West are actually more com-
petitive in terms of labor market characteristics than their com-
parable whites in the non-West, considering the higher mean
earnings for Asian Americans in the non-West, especially for
the younger 1.5-generation (e0.359 – 1 or 43 percent higher earn-
ings for 1.5-generation Asian Americans in the non-West than
whites) as found in Table 3.
In sum, the findings show the following three important pat-
terns. First, net of age, marital status, disability status, educa-
tional level, college major, and college type, both native-born
and 1.5-generation Asian Americans are more likely than
whites to live in the West, regardless of age category. Second,
net of the same variables, there is no significant differential in
average earnings between whites and native-born Asian Ame-
ricans in the West, as well as between whites and 1.5-genera-
tion Asian Americans in the West (except that the younger,
native-born and 1.5-generation Asian Americans have 12 per-
cent higher earnings than whites in the West) than their compa-
rable whites. On the other hand, native-born Asian Americans
in the non-West are disadvantaged (i.e., 7 percent lower or
e–0.075 – 1) in terms of average salaries than whites in the
non-West, while 1.5-generation Asian Americans are advan-
taged (i.e., 8 percent higher or e0.077 – 1) in terms of average
salaries than whites in the non-West, net of other variables.
Nevertheless, if the earnings differentials are separately exam-
ined by three different age groups, Asian Americans in the
non-West do not appear to have any earnings disadvantage in
reference to whites in the non-West. Indeed, the younger 1.5-
generation Asian Americans in the non-West have 43 percent
higher (i.e., e0.359 – 1) earnings than younger whites in the
non-West, net of other variables including selectivity.
Finally, switching regression models demonstrate that both
younger native-born and younger 1.5-generation Asian Ameri-
cans in the West and 1.5-generation Asian Americans in the
non-West have significantly higher average earnings than whites,
after further controlling for selectivity. This indicates that the
estimated earnings differentials for younger Asian Americans and
whites are obscured when using OLS, which does not account
for selectivity. In regard to selectivity, there is a positive selec-
tion into living in the West, while the selection is negative liv-
ing into the non-West. Since the great majority of the sampled
population is whites, we cannot unfortunately tell the extent to
which these positive and negative selectivity are attributed to
Using both OLS and switching regression models, findings
of this study indicate that net of age, education, marital status,
disability, college major, and college type, there is no signifi-
cant differential in earnings between college-educated Asian
Americans (both 1.5-generation and native-born) in the West
and their comparable white counterparts. This finding holds
even when separately examined by three age groups. In the
non-West, on the other hand, native-born Asian Americans are
about 7 percent disadvantaged in terms of earnings, while 1.5-
generation Asian Americans are about 8 percent advantaged in
terms of earnings. The results from the switching regression
Copyright © 2012 SciRes. 165
I. TAKEI ET AL.
model show that selectivity entails in the findings for the
younger age group—net of this selectivity, in addition to other
variables including college major, both 1.5-generation and na-
tive-born Asian Americans have significantly higher earnings
than whites, whether or not in the current residential region is
the West (except native-born Asian Americans in the non-West,
whose earnings are not significantly different from those of
whites). Positive selection into the West is also found for mid-
dle-aged Asian Americans and whites.
In regard to wages and earnings, the findings overall show
that Asian American men (both 1.5-generation and native-born)
do not face disadvantages in the US labor market, net of rele-
vant factors. Switching regression models demonstrate that
both younger native-born and 1.5-generation Asian Americans
across the regions indeed have significantly higher average
earnings than their comparable white counterparts, after further
controlling for selectivity. This research suggests that Asian
Americans do not face a significant net racial disadvantage in
the labor market, as suggested by some research. Asian Ameri-
cans had faced direct and overt racial discrimination in the la-
bor market before World War II. Then this achievement of
parity represents a historic change for native-born and 1.5-
generation Asian Americans. Namely, racial and ethnic discrimi-
nation in the post-Civil Rights era has been notably ameliorated
(Alba & Nee, 1997; Farley & Alba, 2002), at least for Asian
Americans. Findings of this study show that taking region and
selectivity into account does not alter this significant conclu-
Although this research identifies selectivity among the
younger-age and middle-aged groups, we cannot identify what
kinds of characteristics constitute this selectivity. For example,
the findings show a positive selection into currently living in
the West and negative selection into the non-West. Selectivity
may indicate motivation, personality, and competitiveness that
are positively correlated with one’s labor market outcomes.
However, switching regression models do not enable us to
identify any specific components. Some speculations are that,
Asian Americans and whites who currently reside in the West
(especially in California) are more advantaged because they
have to stay productive in their work performance, so that they
can remain in California which has nice weather and amenities.
Or California residents are more eager to take higher-paying
jobs to manage high rents and property taxes to remain in the
state. However, this positive selection residing in the West
largely derives from characteristics of the sampled white popu-
lation. Unfortunately we cannot tell the extent to which this ob-
served positive selection of living in the West holds for Asian
On the other hand, Asian Americans and whites in the
non-West appear to be less competitive, as indicated by nega-
tive selectivity. Yet, again, this negative selection into living
into the West largely derives from the sampled white popula-
tion. It might be possible, for example, to argue that Asian
Americans in the non-West are actually more competitive in
terms of labor market characteristics than their comparable
whites in the non-West, considering the higher mean earnings
for Asian Americans in the non-West, as found in switching
regression models. Findings indeed suggest that 1.5-generation
Asian Americans maintain high economic motivation which
possibly derive from foreign-born parents. In sum, in addition
to the issue of identifying what constitutes selectivity, the find-
ings also do not enable us to see the extent to which the selec-
tivity derives from characteristics of Asian Americans, because
the great majority of the sampled population is whites.
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