Becoming Middle Class: Timing, Cohorts, and the Second Generation

The previous cross sectional analysis provides evidence that native-born Hispanics are making significant economic progress in certain contexts and clearly there is a substantial numerical increase. However, the cross sectional analysis does not tell us what is happening to groups of households over time. Do they gain or slip, on average, over two or more decades. Studies of variations in middle class penetration by time of arrival and a test of the progress of the second and third generation Hispanic households, provide additional important information on the progress of middle class status households.

Timing
The general expectation for immigrants is that households arriving earlier are more likely to have moved up the economic ladder than those who arrive later in time. The assimilation literature in general emphasizes that the process of becoming acculturated and assimilated economically requires time. 

In general, arrivals by 1980 are at or above the average proportion in the middle class. Thus, for the United States as a whole, the middle class proportion is 23.9 percent for arrivals between 1960 and 1970 and 23.5 percent for arrivals between 1970 and 1980 (Figure 10). Overall, the rates are not that different for the older age cohort and similar to the average levels of middle class penetration for the United States as a whole, but for both groups, the level of penetration is not sustained for the arrivals after 1980.

Recent arrivals are very unlikely to be in the middle class. It is this finding that explains the overall lower level of middle class penetration by the foreign-born. In turn, this leads to the question of whether 20 years is a threshold. And whether it will require at least this long or longer for the foreign-born to make the transition to the middle class or whether the post-1980 arrivals will have a much more difficult time of making it to the middle class at all. If there are marked differences in skills between those who arrived before 1980 and who we see joining the middle class, and those who arrived later, then the trajectories of the two groups may not match and may continue to diverge over time. It is not possible to provide a complete answer to the question until the 2000 census and it is just this question that is at the heart of the continuing debate about immigrant progress. Some of the cohort data discussed later in the paper provide a possible set of scenarios of what may happen. 

There are substantial differences across the states and some interesting reversals in the rates of penetration by time of arrival. Florida stands out for the generally very high levels of penetration of the middle class, especially for the older cohorts, and the “drop-off” in levels of penetration occurs only after 1990. Again, the levels of penetration are visibly lower in New York-New Jersey. In the context of the average levels of middle class participation in the US as a whole, the outcomes for three of the four regions are quite notable. All regions except New York-New Jersey outperform the overall US average for arrivals before 1980. Those who arrived earlier have made important strides in joining the middle class and their proportions are not distinguishable from the total population. Florida is notable, especially with the proportions of the older age cohorts. These findings further raise the fundamental question of whether assimilation is working and whether we can we expect the later arrivals to also move up and join the middle class. To answer these questions we can examine cohort changes. 

Cohorts
Following a cohort over time is one way of asking about the progress of groups. By plotting the progress of three foreign-born Hispanic age cohorts who entered the United States by 1980 and three native born Hispanic age groups, it is possible to evaluate the extent to which particular groups are making progress over time. The evaluation compares the proportion of the 20-29 age group who were middle class in 1980 with the proportion of those who were middle class when they were 30-39, 10 years later. Similarly, it can show how many of the age cohort 30-39, who were 40-49 10 years later, are middle class. In this analysis it is not possible to follow the individuals in an age cohort on a year to year basis, but it is possible to examine the group of 20-29 year olds in 1980 and compare them with the 30-39 group ten years later, and then in turn to check that group ten years later still when they are 40-49. There will have been some deaths and some households will have migrated away, but the change in the aggregate is relatively small. Changes in the native-born will be greater for the oldest groups but mortality does not change much between 40 and 60 so we can feel relatively confident that we are capturing the overall changes in the relative economic position of the cohort. I also examine 20-29 year households in 1990 but I can only follow them until 1999. For the foreign-born, I control the cohort by examining the age group 10 years later only for those who had arrived by 1980. New arrivals are not included in the cohort.

For the United States as a whole, young native-born Hispanics are making significant movements into the middle class, but foreign-born Hispanic households make much slower progress and reach only about two-thirds the level of the total native-born (Figure 11). The two-decade increase for native-born Hispanic households is from 15.4 percent to 35.6 percent, slightly more than the position of the 30-39 cohort 10 years later when they are 40-49. In other words, the younger group’s trajectory is faster than that of the older age group. That same group (the 40-49 year olds) 10 years later have lost ground. In other words the gains occur early and are not always sustained. The 20-29 year old native-born Hispanic households in 1990 made real progress by 1999, but did not quite reach the level of the earlier cohort. All native-born cohorts increase their representation at younger ages, but at the older age groups, there is a clear falling off in the ability to maintain middle class status. 

The increases overall do not bring the Hispanic middle class into the same levels of the general population, but at the same time the total native-born population is also having difficulty maintaining its middle class status. The starting levels are significantly higher, but while the youngest age cohort does make progress, it does not reach the levels of the same age cohorts in 1980. Nor does the Hispanic native-born reach the levels of the total native-born. 

Foreign-born groups move upward but at much slower rates, and older groups had losses on average. The most striking finding of the cohort paths is that the foreign-born make much less significant progress over time and that 1990 arrivals do not have strong upward trajectories. 

The state patterns are quite variable. In every case the youngest native-born Hispanics are making significant advances into the middle class (Figure 12). In some cases the proportion of the native-born Hispanics in the middle class doubles as the cohort ages 10 years. This is true in Florida and California where, in general, native-born Hispanic households are outperforming the population as a whole. At the same time, the decline in middle class representation in the older cohort again raises questions about the ability of the Hispanic native-born households to maintain the middle class status as retirement begins and income is reduced. 

Texas, Arizona, and New Mexico and Florida have similar patterns in their cohort trajectories for both native-born and foreign-born Hispanic households. Young native-born groups in 1980 have increased their participation levels and the youngest cohorts have moved up to levels that are similar to households in the aggregate. At the same time the 30-39 year old groups are not moving up as quickly and after 1990 the paths are stable or declining. Native-born Hispanics who were 30-39 or older in 1980 have not managed to sustain their middle class levels. Foreign-born cohorts are lower in initial levels of middle class participation and have slower trajectories of moving up to the middle class. New York-New Jersey is an extreme case. Hispanic households in New York-New Jersey are far from the middle class participation rates of Texas and Florida. The California native-born are doing well and reaching for middle class status. 

Several summary findings emerge from the analysis of middle class cohorts by state and native versus foreign-born. The most pervasive finding is of convergence. The native-born Hispanic groups are converging on ratios of middle class penetration which hover around 30 percent. But as I noted in the previous paragraph, there are very distinct patterns by region. Younger cohorts in California who are native-born are advancing to levels above the population as a whole and are clearly higher than those for the foreign-born. Foreign-born cohorts are moving up, but much more slowly than the native-born of similar ages. Finally, it is clear that older age groups, especially 50-59, have trouble maintaining middle class status. 

The story is one in which there are positive and not so positive interpretations. The penetration of the youngest cohort as it ages is remarkable, but the overall slow increase in the Hispanic foreign-born portends greater difficulty in the future. The substantial declines in the proportion of middle class households in the older age native-born cohorts is a question about the ability of these groups to maintain their middle class lifestyle. At the same time, the outcomes in comparison with the native-born emphasize the convergence between ethnic native-born and the native-born as a whole. The very large differences across regions is a reminder that outcomes vary geographically and that immigrant outcomes must be seen in their geographic and ethnic context. 

Generational Changes
Additional insight into the paths of immigrant groups is added when we examine generational changes — of how the children of immigrants as they in turn become heads of households are doing over time. In this analysis I compare the successes of the children of the foreign-born, and the children of native-born households whose parents were immigrants. In this way we can contrast the first, second and third generations. I examine three immigrant categories, both parents native-born, one parent native-born-one foreign-born and two parents foreign-born. I examine these groups for two age cohorts, 30-39 and 40-49. For the six categories I calculate the proportion who were middle class based on the aggregated 1996-1999 Current Population Survey.

The results are revealing and important, consistent with our expectations about moving up and becoming assimilated economically. Households with two foreign-born parents are less likely to have joined the middle class than are households with one native-born parent, but there is not a great deal of difference between one and two native-born parents (Table 8). The 40-49 age cohort households have higher proportions with middle class status, again as expected. Those households with one foreign-born parent do not have quite the same proportional representation in the middle class as households with two native-born parents, though both groups with at least one native-born parent are almost a third more likely to be members of the middle class, than are households with two foreign-born parents. Households with two native-born parents are closer to the average as a whole in their proportional representation in the middle class.

Puerto Rican households are less likely to be in the middle class though the proportion does increase with age. Having two native-born parents does not increase the likelihood of making it to the middle class. The patterns for Cubans are reversed. The younger cohorts, especially those with foreign-born parents are more likely to be members of the middle class and at a rate which is higher than that for the U.S. population as a whole (Table 8). The data is not sufficiently rich to examine these preliminary results in more detail, but the findings here further reiterate the considerable variation within Hispanic groups and the finding that while some households are doing well, there is much more progress to be made.

What do the generational results add to our earlier findings? They emphasize the rapidity with which all groups move into the middle class with aging. They show that all groups have difficulty maintaining their middle class status with aging, but that such maintenance seems to be more difficult for Hispanic households than households in general. The results also re-emphasize the likely slow upward trajectories of the foreign-born groups, even those who have been here since 1980.