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Poverty Among Puerto Ricans by Maria E. Canabal Illinois State University
Working Paper No. 32 June 1997
About the Author: Maria E. Canabal is a Family Consumer Science Professor at Illinois State University at Normal, Illinois. Her research studies include Latino housing, family well-being in the U.S., and Latino student involvement in higher education. She teaches Management and Family Economics courses and is an active international scholar with interests in the relationships between family economics, fertility, and human capital development.
SUGGESTED CITATION Canabal, Maria, E. Poverty Among Puerto Ricans in the United States, JSRI Working Paper #32, The Julian Samora Research Institute, Michigan State University, East Lansing, Michigan, 1997.
Related Readings
The Julian Samora Research Institute is committed to the generation, transmission, and application of knowledge to serve the needs of Latino communities in the Midwest. To this end, it has organized a number of publication initiatives to facilitate the timely dissemination of current research and information relevant to Latinos. The Julian Samora Research Institute Working Paper Series provides a mechanism for the systematic dissemination of public policy oriented research on issues affecting Latinos in both the United States as a whole, and the Midwest, in particular. The series publishes reports of empirical studies, theoretical analyses, and policy discussions which address the changing role of Latinos in relation to economic, political, religious, education, and social institutions. Table of Contents Poverty Among Puerto Ricans In the United States
The purpose of this study was to identify the major influences of poverty or financial well-being among Puerto Ricans in the United States. Selected variables that measure personal/ psychological influences, family influences, and socioeconomic influences were included in a multivariate analysis. The dependent variable was a computed poverty index to measure economic well-being. The data for this study come from the Hispanic Health and Nutrition Examination Survey, 1982-84 (HHANES). The Puerto Rican sample used for the analyses consists of 1,684 observations from the New York City area, including parts of New Jersey and Connecticut. The variables that had the strongest impact on the poverty index were: health, locus of control, acculturation, family structure, public assistance, employment status, and type of worker. Through multiple regression analyses, some determinants of Puerto Rican poverty were identified. The findings of this and previous quantitative and qualitative studies provide empirical evidence for public policy recommendations. The literature on poverty in the United States is extensive and varied, ranging from the measurement of poverty (Clark, 1981; Fisher, 1984; Weinberg, 1985; Atkinson, 1987; Orshansky, 1988; Ruggles, 1990), to general causes and consequences (Bradbury, Danzinger, Smolensky, and Smolensky, 1979; Danzinger, Haveman, and Plotnik, 1986; Bane and Ellwood, 1986; Tienda, 1988, Peterson, 1991-92) to the examination of poverty among specific population groups (Wilson, 1987; Tienda, 1988; Tienda and Jensen, 1988; Sadefur, 1988). As a group, minorities have always been reported as over-represented among those below the poverty level (U.S. Bureau of the Census, 1986; Rank, 1988; Sandefur, 1989). Among minorities, Puerto Ricans and blacks are found to be the poorest groups when compared to Whites, other Hispanics, and Asians (Sandefur, 1989). One of the most disturbing findings in poverty analyses is the increasing deterioration in economic status for Puerto Ricans in the United States not shared with other groups (Rodriguez and Melendez, 1992; Rodriguez, 1992; Cruz, 1991-92). Tienda (1988:1) reports that "Puerto Rican family income declined by 7.4% in real terms during the 1970's and by an additional 18% between 1979 and 1984." Based on data analyzed in a previous study with Jensen, she further reports that "[t]he share of Puerto Rican families with incomes below one quarter of the median incomes of whites rose from 11% in 1960 to 15% in 1970, 26% in 1980, and 33% in 1985." Furthermore, in their October-December, 1992 Research Advocacy Notes, the National Puerto Rican Coalition reports that: "In 1991 Puerto Ricans had the highest poverty rate for individuals in the nation at nearly 40% of the total Puerto Rican population compared to 33% for African Americans, and 14.2% for the population at large" (Cruz, 1991,92). Tienda (1988:15) explores the disadvantaged position of Puerto Ricans in the labor market as a possible explanation for their poverty status. She reports that proportionally higher "chronic detachment" from the labor force is observed for Puerto Ricans when compared to other Hispanic groups. Some possible explanations explored by the researcher are residential factors, placement in the job "queue," and labor market conditions related to industrial restructuring in areas with high concentration of Puerto Ricans. As further support for the effect of industrial restructuring on Puerto Rican poverty, it has been reported that "the nine cities where the majority of U.S. Puerto Ricans lived in 1980 lost almost one million manufacturing jobs between 1963 and 1982, representing a 44% loss of manufacturing employment..." in industries that typically employed Puerto Ricans" ( Cruz, 1991-92:2). The industrial restructuring has also been identified by Rodriguez (1992) as one of the main causes for joblessness for Puerto Ricans in the New York City area. Several studies (e.g., Cooney and Colon, 1979; Scheirer, 1984; Garfinkel and McLanahan; Bonilla-Santiago, 1988; Sandefur, 1989; Cruz, 1991, Rodriguez, 1992) suggest the relationship between the economic status of Puerto Ricans and the increasing number of their families headed by females. Sandefur (1989:8). For example, reports that in 1985, 70% of the Puerto Rican poor were in families with female heads compared to 26% of white poor. The proportion of Puerto Rican female headed families increased from 34.8% in 1980 to 43.9% in 1985, contributing to the declining economic status of Puerto Ricans in the United States. Cooney and Colon (1979) add to this trend the declining labor force participation of Puerto Rican women due to industrial restructuring that affected industries that employed Puerto Rican women in the Northeast. Melendez and Figueroa (1992) report that city size and labor demand are also contributors of the low labor force participation rate among Puerto Rican women. In support to both the female unemployment and female headship hypotheses, Pelto, Roman, and Liriano (1982:47) found that "single parent, unemployed households show the poorest socioeconomic status" compared to other family structure/ employment status Puerto Rican groups. The National Puerto Rican Coalition, Inc. (NPRC) conducted a study where qualitative data was collected from a group of Puerto Rican AFDC recipients from New York City, Newark, and Philadelphia. The researchers were particularly interested in the reasons for program participation and the accomplishment of self-sufficiency among recipients of AFDC benefits. Cruz (1991:6) reports the findings of this study emphasizing that for Puerto Rican mothers, the decision to participate in welfare is determined more by family-related factors than by work-related factors. In other words, Puerto Rican mothers, especially those without a spouse, prefer to take care of their children themselves and be on welfare rather than being in the work force and leaving their children with strangers that they do not trust. These findings are consistent with the forementioned relationships between poverty status, female headship, and female labor force participation. Some participants in this study reported language barriers, lack of human capital, and poor health as additional reasons for their inability to find job that would contribute to their self- sufficiency. There is an ongoing controversy related to the efficiency of public assistance programs in alleviating the effects of poverty. Sandefur (1989:2) analyzed several of these programs in different categories. His interest was in "the level of participation of different minority groups...[and] their effectiveness in helping minority group members to escape from poverty." In the analysis of the 1981 and 1982 Current Population Surveys, he found that after controlling for need, family structure, residence, and region there was not much racial or ethnic difference in the participation in social welfare. Furthermore, Sandefur (1989:32) reports that "[t]he evidence on the effectiveness of cash transfers in reducing poverty has consistently shown that in the aggregate, cash transfers are less effective in reducing minority poverty than in reducing poverty among whites." Consistent with these findings, the mothers interviewed in the NPRC study say that "neither AFDC support nor supplemental earnings and income are sufficient to support their families" (Cruz, 1991:6). Other possible contributors to the financial well-being of Puerto Rican families have been identified. Among these: discrimination in the labor market, nativity, education, and other human capital variables, residential segregation (Santiago, 1992; Rodriguez, 1992; Massey, 1990), and levels of English proficiency (Velez, 1992). In summary, the studies reviewed here, and several others not included due to space limitations, identify separately most of the variables that were included in this study. It is clear that poverty among Puerto Ricans is not determined by a single set of variables. Various influences need to be further explored and their net contribution to the explanation of poverty status identified. Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References
In this study, a comprehensive model of poverty determinants, was followed. The main questions explored were: -What is the relationship between selected personal/psychological influences and the poverty status of Puerto Ricans in the sample? -What is the relationship between selected family influences and the poverty status of Puerto Ricans in the sample? -What is the relationship between selected socioeconomic influences and the poverty status of Puerto Ricans in the sample? -What is the magnitude of the effect of each one of the above mentioned influences on poverty, after controlling for the others?
Although most of the variables included in these analyses have been explored in previous studies, they have been examined separately. Researchers look at a set of variables (possible causes of poverty), from either a structural or macro perspective, or a human capital/ individual/ micro perspective. They recognize the importance of the others, but usually ignore them in the empirical analyses/ models. For policy recommendation purposes though it is important to identify both macro and micro determinants of poverty. The HHANES data set offers not only an acceptable number of observations for multivariate analyses but also information on possible determinants of poverty at both levels, difficult to find in a single data set. Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References
The Hispanic Health and Nutrition Examination Survey,1982-84 (HHANES) provided the data for this study. The survey was conducted by the United States Department of Health Services and it provides information from the three major Hispanic groups in the United States - Cubans, Mexicans, and Puerto Ricans. For this study, only the Puerto Rican sample was analyzed. This sample consists of 1,684 observations from Puerto Ricans 16 years of age and older in the New York City area, including parts of New Jersey and Connecticut. The sections of the questionnaire used from tape 6521 were: Section E, sociodemographic data of the sample person; Section G, family composition and income data; Section K, adolescent and adult history data (HHANES Documentation).
Model and Estimation Techniques: Based on previous studies, a set of variables were included in the model to explain poverty status among Puerto Ricans in the United States. The model estimated takes the following form:
This model was estimated using multiple regression (OLS) techniques. Preliminary analyses (e.g., correlation) were performed to detect any multicolliniarity or other problems related to the use of the data or the procedures. None were detected.
Definitions of the Variables Poverty Index (POV) - This index is already computed in the HHANES. It consists of a ratio of the midpoint of the income bracket reported for each family in the numerator and a poverty threshold that takes into account family composition, size and age of members as the denominator. The index range from 0.04 to 9.78 in the data. The lower the index, the poorer the family. An index below 1.0 means below poverty level. Non-cash public welfare, such as food stamps, were not included as income for those families receiving these benefits (HHNAES Documen- tation 1984). Personal / Psychological Influences (PPI)- Measured through the following variables:
Family Influences (FI)
Socioeconomic Influences(SEI)- Measured through the following variables:
Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References
Table 1 presents the characteristics of the sample selected for this study. The mean value of the poverty index is 1.53. This means that the household of the average person in the sample is barely above the poverty threshold of 1.0.
Thirty five percent of the sample reported the marital status of the head of the household as ever married, 38% ever-married, spouse present, and 27% ever-married, spouse absent. Forty five percent of the respondents are receiving some form of public assistance. More than half (55%) are either not participating in the labor force or unemployed. Individuals in the sample reported that 32% are employed by private companies and 6% by the government. The rest are either self employed, in a family business without pay or never worked. Among the personal/ psychological influences individuals in good or excellent health, those with higher locus of control scores, and those with a higher degree of acculturation, were better off financially than those that did not exhibit these characteristics. The variable with the higher explanatory power in this group is acculturation. An increase by one unit in the acculturation scale will increase the poverty index (financial well-being) by 11%, holding other variables constant. Gender and education have no statistically significant effect on poverty once other variables are controlled in the models. However, they exhibit the expected sign, negative for gender and positive for education. With respect to family influences, it was found that households with an ever-married head (spouse present or absent) had a higher level of financial well-being (less poor). Among never-married households, those with spouse present were better off financially. The socioeconomic variables that contribute to decreasing the poverty level among Puerto Ricans in the United States were: being employed by the government, or being employed by a private company. Being unemployed or not in the labor force increased poverty by approximately 9%, controlling for public assistance. If there is no control for public assistance (Model 3), the above mentioned conditions increase poverty by close to 18%. The negative sign of the public assistance variable can be explained by the fact that the poorer the respondent, the higher the level of public assistance. Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References
The variables included in this study explain 36% of the variance in the poverty index of the sample. It is clear that both structural and individual/ family factors contribute to the financial well-being of Puerto Ricans in the United States. Employment status, particularly when there is no control for public assistance, is one of the most important determinants of poverty identified. The high proportion of the sample that is either unemployed or not participating in the labor force and its significant effect on the poverty index provide support to other studies that have identified industrial restructuring in the Northeast and its effects as a major contributor to poverty among Puerto Ricans ( Tienda, 1988; Cruz, 1991-92; Falcon and Hirschman, 1992; Rodriguez, 1992). For example, Rodriguez (1992:68) reports that ..." the primary problem of Puerto Ricans is joblessness...due to loss of industries or the restructuring of the industrial economy." Employment then seems to be a critical factor in alleviating poverty among Puerto Ricans, but Rodriguez (1992:69) cautions about the type of job and its effect on poverty. He says that... "low-skilled, dead-end low wage jobs are not the answer to the problems of Puerto Ricans...these types of jobs contribute to their economic deterioration." The industrial restructuring in areas with high concentration of Puerto Ricans had also contributed to the deterioration of neighborhoods and to residential segregation (Massey, 1990; Santiago, 1992). These poor, segregated residential areas were usually neglected in the provision of services such as health care and public schools. Health status was found to be positively associated with financial well-being (see table 2). If health care services are not available or accessible to Puerto Ricans, chances are that their financial status will be directly and indirectly affected. Furthermore, this situation could contribute to a sense of helplessness or external locus of control that can perpetuate poverty. The same association can be made between the deteriorated/ segregated
neighborhoods, the quality of the public school system and poverty. The
mean educational attainment of Puerto Ricans in the sample is less than
high school graduation. This variable is not statistically significant in
explaining financial well-being. Educational attainment has been increasing
for Puerto Ricans over time but the labor force participation..." has
not kept pace with educational attainment" (Cruz, 1991-92:4). This
is a disturbing finding, if human capital investment is counted on for the
economic improvement of Puerto Rican families. Rodriguez (1992:53) points
out that " Puerto Rican youth have increase their educational levels
and yet the essential fact of poverty remains little changed." He also
reports a decline in the returns of college education for Puerto Rican heads
of households between 1970 to 1980, holding other variables constant. These
findings about the effect of education can be linked to various factors
-- the poor quality of the education obtained from inner city schools, the
nature of the job market in relation to level of education, and the discrimination
against Puerto Ricans by employers in the job market. The loss of manufacturing employment and the creation of new jobs that demanded highly skilled and highly educated workers affected those individuals with a high school diploma or less, among them Puerto Ricans in the New York City area who may eventually exit from the labor force (Falcon and Hirschman, 1992). Discriminatory practices in the labor market may also contribute to decrease the positive impact of education on financial well-being (Rodriguez, 1992; Torres, 1992). According to Torres (1992:136), discrimination is an important factor ... "in determining earnings inequality for Puerto Ricans" and thus their financial well-being. Residential segregation of Puerto Rican families (Massey,1990; Santiago, 1992) may contribute to lower contact with people outside the community. This contributes to lower levels of acculturation measured by the use of the English language. The degree of acculturation significantly affects the poverty index of the sample (see table 2). A Puerto Rican in the United States that does not command the English language is going to find barriers in the labor market, regardless of her/ his level of schooling. This effect will be magnified by the economic restructuring discussed earlier. Consistent with the findings of this study Torres (1992:137) identifies English language proficiency as a possible explanation for the fact that..." second generation Puerto Ricans - males and females - earn more than first generation arrivals." The marital status of the household head was also found to affect the financial well-being of the sample. This is consistent with numerous other studies already mentioned. Ever married households are better off financially than never married households. For those households where both spouses are present there is an increase in their financial well-being. Based on the proportion of Puerto Rican female headed families in the United States and the proportion of women in the sample, it is reasonable to assume that most of the ever-married, spouse absent and never married households in the sample are headed by women. As mentioned before, these households exhibit poverty levels higher than any other group of Puerto Ricans. The proportion of female headed families among Puerto Ricans... "aggravate the impact of structural factors" (Cruz, 1991-92:4). Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References Conclusions and Recommendations
Torres (1992:136) sees poverty as a consequence of four main factors: "low-wages, underemployment, unemployment, or labor force non-participation." The variables included in this study in the three categories - personal/ psychological influences, family influences, and socioeconomic influences all contribute directly or indirectly to the above mentioned factors. It seems that the industrial restructuring in areas with high concentrations of Puerto Ricans combined with discriminatory practices in the labor market, residential segregation, and some individual/family characteristics contribute to unemployment, low wages, underemployment, and eventual exit from the labor market, causing the high proportion of Puerto Ricans living in poverty in the United States. Based on the findings of this and previous studies, the following public policies are recommended. First of all, high quality education and training of future Puerto Rican generations is crucial. Efforts should be geared toward a) the improvement of the educational systems that serve inner city communities and b) the retention of Puerto Rican students through graduation. Post secondary training should address the need for highly skilled workers. Colleges and universities should increase their efforts to recruit and retain Latino students, including Puerto Ricans. With the proper skills and education, Puerto Ricans can adapt to the changing job market demands. This in turn will increase their employment opportunities, their wages, their self esteem, and even their health and sense of well-being. Their dependence on public assistance will decrease. They can also contribute, through a higher purchasing power and taxes, to the improvement of their communities. Government incentives in the form of tax advantages for private enterprises to locate their businesses in segregated, deprived communities can contribute to the alleviation of Puerto Rican poverty by providing jobs and revitalizing the neighborhoods. The revitalization of the neighborhoods can also be accomplished by providing public health care, public schools and other services. Availability of acceptable day care alternatives will facilitate the incorporation into the work force of Puerto Rican women, especially single mothers. Day care facilities should be affordable, sensitive to cultural differences and close to the work place. Besides day care, these mothers will also need training to prepare themselves for jobs with decent wages that can take them out of poverty and the welfare roles. Reasonable time is needed for the transition from dependency to financial independence. During this period of time, services such as health insurance and child care subsidies should be maintained without income penalties. In addition, efforts to located absent fathers should be increased and child support legislation enforced. All of these efforts are not going to have the desired effects on poverty, if discriminatory practices in the labor market continue. The legislation to address this problem is available, but a stronger commitment to enforce these laws and regulations is needed. For both individuals and families training of self-sufficiency is important. This type of training can include, but should not be limited to, the identification and management of personal, family, and community resources that will empower Puerto Ricans in poverty to help themselves. The intervention at the micro and macro levels, taking into consideration the findings of this and previous studies, will certainly contribute to the alleviation of the disadvantaged economic position of Puerto Ricans in the United States. Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References
Atkinson, A. B. (1987). On the measurement of poverty, Econometrica, 55(4): 749-764. Bane, M. J. and Ellwood, D. (1986). Slipping into and out of poverty: the dynamics of spells, Journal of Human Resources, 21(1): 1-23. Bonilla-Santiago, G. (1988). Hispanic Women in New Jersey: A Survey of Women Raising Families Alone. The Hispanic Women Task Force of New Jersey. Bradbury, K., Danziger, S., Smolensky, E., and Smolensky, P. (1979). Public assistance, female headship, and economic well-being, Journal of Marriage and the Family, (August): 519-535. Clark, S., Hemming, R., and Ueph, D. (1981). On indeces for the measurement of poverty, Economic Journal, 91 (June): 515-26. Cooney, R. S. and Colon, V.A. (1979). Declining female participation among Puerto Rican New Yorkers: a comparison with native white non-spanish New Yorkers, Ethnicity, 6 (3) :281-297. Cruz, J.E. (1990). Implementing the Family Support Act; Perspectives of Puerto Rican Clients. National Puerto Rican Coalition, Inc., Washington, D.C. Cruz, J. E. (1991-92). Puerto Rican Poverty, Advocacy Notes, National Puerto Rican Coalition, (October-December): 2-11. Danzinger, S.H., (1989). Antipoverty policy and welfare reform, In Cottinghan, P. and Ellwood, D.T. (Eds.), Welfare Policy for the 1990's. Cambridge: Harvard University Press. Danzinger, S. H., Haveman, R. H., and Plotnick, R. D. (1986). Antipoverty policy: effects on the poor and the non-poor, In Danzinger, S. H. and Weingberg, D. (Eds.), Fighting Poverty: What Works and What Doesn't, pp. 50-77, Cambridge: Harvard University Press. Falcon, L. M. and Hirschman, C. (1992). Trends in labor market position for Puerto Ricans on the mainland: 1970-1987, Hispanic Journal of Behavioral Sciences, 14(1): 16-51. Fisher, G. M. (1984). Commentary: the poverty measure, Social Science Bulletin, 47 (July): 24-27. Garfinkel, I. and Mc Lanahan, S. S. (1986). Single Mothers and Their Children: The New American Dilemma, The Urban Institute Press, Washington, D.C. Massey, D. S. (1990). American apartheid: segregation and the making of the underclass, American Journal of Sociology, 96: 329-357. McLanahan, S. (1985). Family structure and reproduction of poverty, American Journal of Sociology, (January) 90: 873-901. Melendez, E. and Figueroa, J. (1992). The effect of labor market conditions on labor force participation of Puerto Rican, white, and black women, Hispanic Journal of Behavioral Sciences, 14(1): 76-90. Orshansky, M. (1988). Commentary: the poverty measure, Social Security Bulletin 51 (October): 1-4. Pelto, P.J., Roman, M., and Liriano, N. (1982). Family structures in an urban Puerto Rican community, Urban Anthropology, 11 (1): 39-58. Peterson, P. E. (1991-92). The urban underclass and poverty paradox, Social Science Quarterly, 106(4): 617-637. Rank, M.R. (1988). Racial differences in length of welfare use, Social Forces (June) 66: 1080- 1101. Rodriguez, C. and Hemendez, E. (1992). Puerto Rican poverty and labor markets, Hispanic Journal of Behavioral Sciences, 14(1): 4-15. Ruggles, P. (1990). Drawing the Line: Alternative Poverty Measures and Their Implications for Public Policy, The Urban Institute Press, Washington, D.C. Sandefur, G.D. (1988). The duality in federal policy toward minority groups, In Sandefur, G.D. and Tienda, M. (Eds.) Divided Opportunities: Minorities, Poverty, and Social Policy. Plenum Press: New York and London. Sandefur, G.D. (1989). Minority Participation in Social Welfare and Income Transfer Programs, Institute for Research on Poverty Discussion Paper No. 918-90. Santiago, A. M. (1992). Patterns of Puerto Rican segregation and mobility, Hispanic Journal of Behavioral Sciences, 14(1): 107-133. Scheirer, M.A. (1984). Household structure among welfare families: correlates and consequences, Journal of Marriage and the Family (Nov.) 45: 761-771. Tienda, M. (1988). Puerto Ricans and the Underclass Debate: Evidence for Structural Explanations of Labor Market Performance, Discussion Paper Series, Economic Research Center/NORC. Tienda, M. and Jensen, L. (1988). Poverty and minorities: a quarter century profile of color and socioeconomic disadvantage, In Sandefur, G.D. and Tienda, M. (Eds.), Divided Opportunities: Minorities, Poverty and Social Policy, Plenum Press, New York: 25-33. Torres, A. (1992). Nativity, gender, and earnings discrimination, Hispanic Journal of Behavioral Sciences, 14(1): 134-143. U.S. Bureau of the Census (1986). Characteristics of the population below the poverty level: 1984, Current Population Reports, Series P-60, No. 152. Washington, D.C.: U.S. Printing Office. Objectives | Methodology Data and Sample | Results | Discussion | Conclusions and Recommendations | References |
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Forty percent of the individuals in the sample are male,
60% female. The self reported health status for these individuals is approximately
3 in a scale where 1 is poor and 5 is excellent. The mean educational attainment
is 10.25 years. The respondents have an average locus of control score of
2.18 and a 2.85 score in acculturation.
