SGER: Annual Income, Hourly Wages, and Identity Formation Among Latinos

Florida State University, Tallahassee FL

Investigators

Abstract

This exploratory research examines economic incentives for alternative racial identity norms among Hispanic Americans, with a special focus on persons of Mexican descent. The theoretical model has two pure norms: an acculturationist norm and a racial identity norm. If an acculturationist norm prevails Hispanics will acculturate into American society as Non-Hispanic whites and will not face persistent racial discrimination in the labor market. If a racial identity norm prevails Hispanic will develop a unique race identity, i.e., neither black nor white, and face persistent racial discrimination in the labor market. Empirical evaluation suggests that an acculturationist norm will likely prevail among Mexican and Cuban Americans. Accordingly, Hispanic Americans, especially persons of Mexican and Cuban descent but less so Puerto Ricans, are able to increase income annual income and hourly wages by abandoning a unique Hispanic racial identity and acculturating into a Non-Hispanic white racial identity. However, neither the abandonment of Spanish nor the abandonment of a specifically Hispanic racial self-identity is sufficient to overcome the penalties associated with having a dark complexion and Non-European phenotype. This is a unique study. Many economic studies have examined the impact on race on economic outcomes but no previous study has examined the formation of racial identity as an economic variable, i.e., to explore the thesis that racial identity is endogenous.