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Poverty across ethnic groups through recession and austerity

This research project has been completed. Please contact a team member for further information.

Conclusions

  • Average incomes fell across all groups other than Pakistanis, whose average household incomes increased slightly (after deducting housing costs). Groups seeing the largest relative falls in average income were Chinese (30 per cent) followed by Black African, Indian and Other White (10 per cent). For the White majority, Black Caribbean and Bangladeshi groups, incomes fell by 3–4 per cent.
  • For most groups, drops in income from earnings and investments drove falls in household income.
  • Employment rates fell among both sexes in the Black Caribbean, Black African and Other White groups. For the rest, employment rates fell for men but rose for women, notably among Bangladeshis. As a result, the proportion of couples with both adults in paid work increased among Pakistani, Bangladeshi and Chinese groups by 7 to 15 percentage points. Unemployment rates increased, mostly for younger people. For older workers, the hours worked fell. Unusually, Pakistani men’s employment rate increased, helping to explain why Pakistani households’ incomes did not fall.
  • The safety net of social security benefits and tax credits helped to offset part of the fall in earnings. Falls in deductions (including taxes) had a similar effect.
  • Housing costs increased most for the Chinese and Other White groups, who had the highest proportion of private renters.
  • Most likely to be in persistent poverty were the Pakistani and Bangladeshi groups, followed by Black African and Black Caribbean groups.
  • For every ethnic minority group, there was an association between poor English skills and persistent poverty. Having English as a first language reduced the probability of being in persistent poverty by 5 percentage points.

Background

Economic conditions vary widely across ethnic groups in the UK. Before the recession, Chinese and Other White groups had higher average weekly household incomes (after deducting housing costs) – £581 and £551 – than the White majority (£508); the Indian group had lower incomes (£467). Incomes of the Black Caribbean and Black African groups were even lower (£376 and £335), and for Pakistanis and Bangladeshis the lowest of all (£266 and £245). Living conditions measured through material deprivation showed a similar picture, except that the Black Caribbean and Black African groups had similar levels of deprivation as Pakistanis and Bangladeshis.

Team members

Dr Alita Nandi

Research Fellow - ISER - University of Essex

Working jointly with Dr Paul Fisher on data preparation, analysis and report writing


Dr Paul Fisher

Senior Research Officer - ISER - University of Essex

Working jointly with Dr Alita Nandi on data preparation, analysis and report writing.


Professor Mike Brewer

Professor of Economics, Director of MiSoC - ISER - University of Essex

Professor Brewer will advise on analysis


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Photo credit: Tom Blackwell