From an economic standpoint, Asian Americans are presumed to fare better than average, even during downturns—a perception that contributes to their reputation as “model minorities.” Indeed, from 2007 to 2010, Asian Americans had annual unemployment rates that were slightly lower than those of whites. But these numbers mask persistent disadvantages for Asian Americans.

UPDATE: May 2012 supplement shows that Asian Americans continued to suffer the most from long-term unemployment in 2011

This issue brief begins by examining and explaining patterns in Asian American unemployment rates from 2007 to 2010. It then examines in detail a particular subset of unemployed Asian Americans: those who have been out of work for more than half a year, also known as the long-term unemployed.

Principal findings include:

• Overall, Asian Americans have lower unemployment rates than whites, but this is due to Asian Americans’ higher education levels.
• Highly educated Asian Americans suffer from higher unemployment rates than similarly educated whites. Specifically, Asian American workers with at least a bachelor’s degree are more likely to be unemployed than white workers with the same level of education—a fact that is particularly salient because 57.2 percent of the Asian American labor force falls into this category.
• Highly educated Asian Americans’ higher unemployment rates when compared with highly educated whites are partly due to nativity—i.e., the fact that Asian Americans are more likely to be foreign born.
• In 2010, Asian Americans had the highest share of unemployed workers who were unemployed long term (for more than half a year) when compared with white, black, and Hispanic workers. That year, nearly half of all unemployed Asian Americans fell into this category.
• Being foreign born and residing in states with high long-term unemployment partly explains Asian Americans’ high long-term unemployment rates.
• Racial bias appears to be a factor in patterns of unemployment and long-term unemployment among Asian Americans. Compared with similar white workers, many Asian American workers are having a harder time finding employment.

Patterns in unemployment rates among Asian Americans

Asian Americans typically have lower unemployment rates than whites, contributing to the common belief that Asian Americans are more economically successful than average. Figure A shows unemployment rates by quarter from 2007 through 2010. Generally, Asian American unemployment tracks slightly lower than that of white Americans. During the last quarter of 2010, however, the Asian American unemployment rate was 7.5 percent, compared with 7.4 percent for whites.1

Asian American unemployment rates are generally lower because Asian American workers have higher education levels on average than white workers. As Table 1 shows, Asian American workers are more likely than white workers to have bachelor’s or advanced degrees. More than half (57.2 percent) of Asian American workers fall into this category, compared with slightly less than two-fifths (38.6 percent) of white workers. Workers with higher education levels generally have lower unemployment rates. As Figure B shows, unemployment rates are lowest for those with at least a bachelor’s degree, among both Asian American and white workers.

Yet as Figure B also indicates, Asian Americans with higher education levels are disadvantaged when compared with similarly educated white workers. In 2010, 6.8 percent of Asian Americans age 25 and older with a bachelor’s degree were unemployed, compared with 4.7 percent for similarly educated whites. Asian Americans with an advanced degree and with some college education also had higher unemployment levels: 3.7 percent compared with 3.2 percent for those with an advanced degree, and 8.1 percent compared with 7.4 percent for those with some college.

In contrast, Asian American workers with a high school education or less fared better than similarly educated white workers. For example, the unemployment rate for Asian Americans with less than a high school education was 10.9 percent, compared with 15.0 percent for whites. Asian American high school graduates had an unemployment rate of 7.7 percent, compared with 9.0 percent for white high school graduates. But as Table 1 shows, only about one-fourth of Asian American workers have these education levels; the remaining three-fourths are disadvantaged relative to similarly educated whites. These patterns are consistent with those found by Austin (2010).

Table 2 illustrates how these overall disparities generally started out very small in 2007 and 2008 but widened in 2009 and 2010 in the immediate aftermath of the Great Recession. It is important to note that during every year examined, Asian Americans with a bachelor’s or an advanced degree were more likely to be unemployed than similarly educated whites. In contrast, over all four years, Asian Americans with a high school education or less were less likely to be unemployed than were comparable whites.

Explaining patterns in Asian American unemployment rates

What can explain these counterintuitive patterns—in particular, that of highly educated Asian Americans having higher unemployment rates than similarly educated whites? Could nativity play a role? In other words, could these patterns be driven by the fact that most Asian Americans in the labor force—more than three-fourths—are immigrants, compared with only 5 percent of white workers?2

Since the majority of Asian American workers are foreign born and the vast majority of white workers are U.S. born, it is useful to compare the rates for foreign-born Asian Americans with the rates for U.S.-born whites. This demonstrates that nativity does indeed help explain these patterns. For example, in 2010, 7.2 percent of foreign-born Asian Americans with a bachelor’s degree were unemployed, compared with 4.6 percent of similarly educated U.S.-born whites (as shown in Table 2). Among those with an advanced degree, foreign-born Asian Americans had an unemployment rate of 3.8 percent, while U.S.-born whites had a rate of 3.1 percent.3

As noted previously, more than three-fourths of Asian American workers are foreign born, while 95 percent of white workers are U.S. born. Thus, the overall unemployment disparities between Asian Americans and whites with bachelor’s and advanced degrees are affected by highly educated, foreign-born Asian Americans having higher unemployment rates than similarly educated U.S.-born whites.4

Aside from nativity, another factor in these disparities in unemployment rates could be racial bias. Research finds discrimination at the top; in other words, Asian Americans with higher education levels face more discrimination in employment than those with lower levels (Sakamoto and Furuichi 2002). This would help explain the overall pattern of highly educated Asian Americans having higher unemployment rates than similarly educated whites. In particular, it would explain why highly educated native-born Asian Americans tend to have higher unemployment rates than similarly educated native-born whites (as shown in Table 2). In addition, experiments on implicit bias find that Asian Americans are usually perceived as foreign born.5 Thus, it is likely that less-educated Asian Americans are more able to obtain lower-paid jobs—jobs deemed appropriate for immigrants. This helps explain why, overall, Asian Americans with lower education levels have lower unemployment rates than less-educated whites.

Explaining high long-term unemployment rates among Asian Americans

After exploring overall unemployment trends among the Asian American population, this issue brief will now focus on a particular subset of unemployed Asian Americans: the long-term unemployed, or the share of the jobless who have been unemployed for at least 27 weeks (more than half a year).6

Among the more troubling aspects of the Great Recession and its aftermath are the record-breaking levels of long-term unemployment. Despite their lower overall rates of unemployment, Asian Americans had higher rates of long-term unemployment in 2010 than whites, blacks, and Hispanics.

Figure C shows that the share of unemployed workers who have been unemployed long term has steadily increased for all racial groups as a result of the recession. In 2007, 20.9 percent of unemployed Asian Americans had been jobless for more than half a year. This share increased to 35.5 percent in 2009 and to 48.7 percent in 2010. Asian Americans had the second-highest rate of long-term unemployment from 2007 to 2009, after African American workers. But in 2010, Asian Americans surpassed African Americans in this measure: 48.7 percent of Asian Americans who were unemployed were without work for more than half a year, compared with 48.5 percent for African Americans. Meanwhile, the rate stood at 42.7 percent for whites and 39.3 percent for Latinos.

Are ethnic enclaves the answer?

What can account for Asian Americans having the highest rate of long-term unemployment? Some have surmised that this phenomenon is due to ethnic labor markets—that Asian Americans working in restaurants and in small stores find jobs through family and community contacts, and that when these options are no longer available, they are at a loss as to how to find work elsewhere. If this were true, less-educated Asian Americans—those who tend to work in establishments such as restaurants and retail stores and who often rely on family and community contacts to find work—would have higher long-term unemployment rates than their better-educated peers.

But overall, the data suggest otherwise. For example, Table 3 shows that Asian Americans with less than a high school education are less likely than those with some college or a bachelor’s degree to be among the long-term unemployed—a finding inconsistent with the ethnic enclave explanation. (Notice also that at every level of education, except among those who did not complete high school, Asian Americans are more likely than white workers to be among the long-term unemployed.) Thus, other factors besides ethnic niches drive the high long-term unemployment rates for Asian Americans.

Is being foreign born a factor?

Another possible explanation for Asian Americans’ high long-term unemployment rates is that they are more likely to be immigrants. According to this theory, language and other barriers may prevent them from finding jobs as easily, and employers may have a preference for U.S. citizens, whether because of restrictions on hiring immigrants, less paperwork involved for U.S. citizens, preferences for native-born workers, and/or other reasons.

As shown in Table 4, immigrants—whether Asian or white—are more likely to be long-term unemployed. For example, long-term unemployment rates for foreign-born Asian American workers stood at 54.3 percent in 2010, compared with 51.5 percent for U.S.-born Asian Americans. Because most Asian American workers are foreign born, does their high rate of long-term unemployment result from being immigrants? In part, it does. Among workers 25 years old and over, if Asian Americans had the same low percentage of foreign-born workers as white workers, and if everything else remained the same, their overall long-term unemployment rate would drop by approximately 7.8 percentage points (see Appendix).7 This indicates that Asian Americans’ greater proportion of foreign-born workers, coupled with foreign-born workers’ increased likelihood of being unemployed long term, contribute to Asian Americans’ high long-term unemployment rates.

Are geographical differences a factor?

Another factor that could explain Asian Americans’ high long-term unemployment rates is if they live in areas with unusually high joblessness. Asian Americans are concentrated in a few geographical areas, with almost one-third living in California (see Figure D). Could it be that California and other states with large Asian American populations have unusually high long-term unemployment rates, thereby explaining Asian Americans’ higher incidence of long-term joblessness? To an extent, the answer is yes. If Asian Americans were geographically dispersed across the 50 states in the same shares as whites, but all else remained the same, their overall long-term unemployment rate would fall by 5.1 percentage points (see Appendix). In other words, Asian Americans have higher long-term unemployment rates partially because they live in states with elevated levels of long-term joblessness.

Is race a factor?

Since Asian Americans have higher long-term unemployment rates than white workers at nearly every education level, race appears to be a factor behind their higher long-term unemployment rates. One way to try to determine whether racial bias explains Asian Americans’ high long-term unemployment rates is to examine whether they would have lower rates within education levels if they were white. In other words, if Asian Americans had the long-term unemployment rates of whites within each education level, would their overall long-term unemployment rate decrease?

Among the 25-and-over population, if Asian Americans had the same (usually lower) long-term unemployment rates as whites within educational levels, but if everything else remained the same, the Asian American long-term unemployment rate would fall by 8.7 percentage points (see Appendix). This finding indicates that racial bias may help explain Asian Americans’ high long-term unemployment rates, since these rates persist despite accounting for educational differences.

More evidence that racial bias might play a role is the fact that Asian Americans’ age distribution should make their  long-term unemployment rates lower than those of whites. Asian Americans are younger on average than white Americans (Kim and Mar 2007), and as demonstrated in Table 5, younger workers have lower, not higher, rates of long-term unemployment. Thus, the younger age distribution of Asian Americans should result in lower, rather than higher, long-term unemployment rates.

However, compared with white workers, Asian Americans had higher long-term unemployment rates within every age group except the youngest workers (between ages 16 and 24) in 2010. For workers age 16 to 64 years old, if Asians had the same long-term unemployment rates within each age group as whites, but if all else remained the same, their long-term unemployment rate would fall by 2.1 percentage points (see Appendix). This leaves open the possibility that racial discrimination, rather than Asian Americans’ age distribution, is a factor behind their higher long-term unemployment rates.

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In sum, ethnic niches do not account for Asian Americans’ higher rates of long-term unemployment, whereas living in states with higher long-term unemployment partially does. More important, however, is the fact that Asian Americans are more likely to be foreign born, and that foreign-born workers have a more difficult time finding jobs once they are unemployed. Finally, racial bias may also explain their higher rates, as Asian Americans have higher long-term unemployment rates than whites even after accounting for the differences in their educational and age distributions. These findings shed light on why Asian Americans are more likely to be unemployed long term than whites.

Conclusion

Although Asian Americans have lower-than-average unemployment rates, Asian Americans with bachelor’s or advanced degrees are more likely to be unemployed than white workers with similar education levels. Since Asian Americans with at least a bachelor’s degree make up more than half of the Asian American labor force, the majority of Asian American workers are unfairly disadvantaged relative to similarly educated whites.

Data suggest that nativity plays a role in these disparities: Highly educated Asian Americans have higher unemployment rates than similar whites, in part, because highly educated foreign-born Asian Americans have higher unemployment rates than U.S.-born whites. This affects the overall unemployment disparities between Asian Americans and whites with bachelor’s and advanced degrees because more than three-fourths of Asian American workers are foreign born, while 95 percent of white workers are U.S. born.

Racial bias may also help explain these disparities in unemployment rates. Research finds discrimination at the top and a glass ceiling; in other words, Asian Americans are seen as technically competent and good workers, but not as leaders meriting the corner office (Kim 2010; Sakamoto and Furuichi 2002). The result is that even among those born in the United States, Asian Americans with higher education levels have higher unemployment rates than similarly educated whites. In addition, implicit bias experiments find that Asian Americans are perceived as foreigners, since most Asian Americans are indeed immigrants. Thus, it is likely that less-educated Asian Americans are more able to obtain lower-paid jobs—jobs deemed appropriate for immigrants. This could explain why, overall, Asian Americans with lower education levels have lower unemployment rates than similarly educated whites. At the same time, perceptions that Asian Americans are foreign born and thus better suited to lower-paid work could make it more difficult for highly educated Asian Americans to find higher-paid jobs and advance into leadership positions.

Asian Americans are further disadvantaged in that, as of 2010, they had higher rates of long-term unemployment than whites, blacks, and Hispanics. Although some believe that ethnic niches (i.e., a heavy reliance on family and community contacts to find employment) are responsible, this does not appear to be the case. Instead, being foreign born and residing in states with high long-term unemployment partly explains these high rates. Another important potential factor is racial bias: Within most education levels and within most age groups, Asian Americans have higher long-term unemployment rates than white Americans. Thus racial bias must be considered as part of the explanation for their high long-term unemployment rates. Taken together, these factors can help explain why Asian Americans experience longer durations of joblessness once they are unemployed.

Clearly, more research is necessary to evaluate the extent to which racial bias—and/or a combination of the other factors examined here—explains the patterns in Asian Americans’ unemployment rates and long-term unemployment rates discussed in this issue brief.

— Marlene Kim is a professor of economics at the University of Massachusetts at Boston, where she conducts research on discrimination and the working poor and teaches courses on unions and collective bargaining, sex-segregated labor markets, and the economics of social welfare. Professor Kim is the author of  Race and Economic Opportunity in the Twenty-First Century (Routledge 2007). She received her PhD from the University of California-Berkeley.

Endnotes

1. People of Hispanic ethnicity are not included in racial counts in this paper, e.g., the unemployment rate of whites does not include whites who are also Hispanic. (Since Hispanic whites have higher unemployment rates than non-Hispanic whites, including Hispanics would raise the white unemployment rate.) The white, Asian, and black categories in this paper also exclude biracial or multiracial individuals. Thus, the race categories in this issue brief (white, black, and Asian) and ethnic category (Hispanic) are considered mutually exclusive.

2. Author’s analysis, not shown, of 2010 Current Population Survey data from the Bureau of Labor Statistics.

3. The generally lower unemployment rates of highly educated foreign-born Asian Americans compared with highly educated foreign-born whites (as shown in Table 2) most likely result from the former returning to their countries of origin when faced with economic hardship.

4. It should also be noted that the unemployment rates of foreign-born Asian Americans with bachelor’s and advanced degrees increased more than those of similarly educated U.S.-born Asians from 2007 to 2010. This rise contributed to the widened overall Asian/white unemployment gap among the college-educated in 2009 and 2010.

5.  Project Implicit was created to offer the Implicit Association Test, a test that measures automatic associations in people’s minds that shape their perceptions, sometimes unconsciously. Large datasets compiled through the Project Implicit website (https://implicit.harvard.edu/implicit/) are available for analysis.

6. Throughout this issue brief, phrases such as “long-term unemployment rates,” “the long-term unemployed,” etc., refer to the share of the jobless who have been unemployed for at least 27 weeks (more than half a year).

7. Note that this analysis (as with the other shift-share analyses in this section of the issue brief) only considers the effect of a single variable and does not change other factors that may also increase or decrease the unemployment rate. (See Appendix.)

References

Austin, Algernon. 2010. Hidden Disadvantage: Asian American Unemployment and the Great Recession. Economic Policy Institute Issue Brief No. 277.

Current Population Survey basic monthly microdata. Various years. Survey conducted by the Bureau of the Census for the Bureau of Labor Statistics [machine-readable microdata file]. Washington, D.C.: U.S. Census Bureau. http://www.bls.census.gov/cps_ftp.html#cpsbasic

Kim, Marlene. 2010. “Glass Ceiling.” In Encyclopedia of Contemporary Asian American Issues Today, edited by Edith Wen-Chu Chen and Grace J. Yoo, pp. 107–10. Greenwood.

Kim, Marlene and Don Mar. 2007. “The Economic Status of Asian Americans.” In Race and Economic Opportunity in the 21^st Century, edited by Marlene Kim, pp. 148–84. Routledge.

Sakamoto, Arthur and Satomi Furuichi. 2002. “The Wages of Native-Born Asian Americans at the End of the Twentieth Century.” Asian American Policy Review, vol. 10, pp. 1–16.

Appendix

Table A1 shows the analysis of long-term unemployment summarized in the text. It examines the extent to which factors such as education, nativity, geographical distribution, or age affect long-term unemployment rates among Asian Americans when compared with racial differences within these categories. It is important to note that these analyses are calculated based on the percent of the labor force that is long-term unemployed. Thus, we are examining the effect of changes in the characteristics of the labor force and not changes among the unemployed. Since the share of unemployed workers who are long-term unemployed is the measure discussed in the second section of this issue brief, the results of the analysis are then converted to a share of the unemployed that has been jobless for 27 weeks or more.

The first group of results, “Effects of demographic distribution,” examines how Asian Americans’ long-term unemployment rates would change if Asian Americans had the same demographic distribution as whites in terms of education, nativity, geography, and age. For example, when looking at education, the first column in this group shows that Asian Americans’ actual long-term unemployment rate is 53.8 percent for those age 25 and older. The second column indicates that if Asians had the same educational distribution as whites (in terms of the share who have a high school education, the share who have a bachelor’s degree, etc.), Asian Americans’ overall long-term unemployment rate would be 58.1 percent, an increase of 4.3 percentage points.

The second grouping of columns, “Effect of being Asian within categories,” explores the extent to which race is the cause of higher long-term unemployment for Asian Americans. It examines how Asian Americans’ long-term unemployment rates would change if Asian Americans had the same long-term unemployment rates as whites within each category (education, nativity, geography, and age), yet maintained their own demographic distribution. Thus the middle and last columns in the education row indicate that within education levels, if Asian Americans had the same long-term unemployment rates as whites, Asian Americans’ overall long-term unemployment rate would be reduced by 8.7 percentage points, to 45.1 percent.