Poverty among minorities in the United States: Explaining the racial poverty gap for Blacks and Latinos

The two largest minorities in the United States, African Americans and people of Hispanic origin, show official poverty rates at least twice as high as those of non-Hispanic Whites. These similarly high poverty rates between the two minorities are, however, the result of different combinations of factors related to the specific characteristics of these two groups. In this paper, we analyze the role of demographic and labor-related variables in the current differential of poverty rates among racial and ethnic groups in the United States and its recent evolution. Our results show, first, that these differentials are largely explained by differing family characteristics of the ethnic groups. Furthermore, we show that while labor market activity of family members and a preponderance of single mothers play a more significant role in the higher poverty rates of Blacks, a larger number of dependent children is closely associated with higher poverty among Latinos, who also suffer from a larger educational attainment gap and higher immigration rates.