Culture, Human Capital, and the Earnings of West Indian Blacks

Black immigrants from the British West Indies and their descendants have long held the interest of historians and sociologists because they provide a means of understanding the influence of differing cultural background on black economic progress. Numerous accounts from before World War II describe the enterprise and business acumen of West Indians, and it is widely believed that West Indians had (and have) higher socio-economic standing than other blacks in the United States [Ueda, 1980]. As Nathan Glazer and Daniel Patrick Moynihan [1963, p. 35] summarized the prevailing view in their widely read account, "[T]he West Indians' most striking difference from the Southern Negroes was their greater application to business, education, buying homes, and in general advancing themselves." The relative success of West Indians has been cast in economic terms by Thomas Sowell, who attributes the apparently superior performance of West Indians to unobserved human capital to a "culture" that embodies "a whole constellation of values, attitudes, skills, and contacts that are related to success in the labor market" [Sowell, 1981a, p. 282]. The logic of Sowell's argument suggests that the culture of West Indian blacks allowed them to overcome or at least reduce the ill effects of discrimination on their incomes and well-being, and that discrimination alone cannot be blamed for the low incomes of American blacks. Although the idea that West Indians have succeeded because of their distinct cultural background is widespread, there has been relatively little empirical investigation of the issue. Sowell [1978, pp. 41-48, 398-415; 1981b, p. 8] compiled some striking tabulations from the 1970 Census of Population, and concluded that the median family income of West Indians was only 6 percent below the national average of all families in 1969, whereas the median family income of Afro-American blacks (Sowell's "American Negroes") was 38 percent below the national average. Barry Chiswick [1980, chapter 7] also used 1970 Census data, but focused on comparisons among closely-defined black groups. He found that native-born blacks of West Indian parentage had earnings that were 8 to 11 percent higher than the earnings of native-parentage blacks, and that native-born blacks of other foreign parentage had earnings that were 12 to 17 percent lower. Note that Sowell's finding is stronger than Chiswick's: Sowell suggests that West Indians perform nearly as well as whites, whereas Chiswick suggests only that West Indians do better than other black groups. This paper offers an empirical analysis of West Indians' performance in the U.S. labor market, drawing adjusted comparisons between the earnings of native-born black American men of West Indian ancestry and the earnings of other native-born men, both black and white. The data required for these comparisons come from the 1980 Census of Population, in which native-born respondents reported their ancestry. The results offer a mixed picture of the success of West Indians, suggesting that native-born blacks of West Indian ancestry do have somewhat higher earnings than other native-born blacks, other things equal. Nevertheless, there is still a large earnings gap between native-born blacks of West Indian ancestry and native-born whites that cannot be explained by observable characteristics.