Government Equalities Office 9th Floor Eland House Bressenden Place London SW1E 5DU Tel: 030 3444 0000 Email: enquiries@geo.gsi.gov.uk www.equalities.gov.uk Crown copyright 2010 JN 402398

Ethnic minority womens poverty and economic well being

Alita Nandi and Lucinda Platt. Institute for Social and Economic Research, University of Essex

September 2010

Ethnic minority womens poverty and economic well being

Alita Nandi and Lucinda Platt Institute for Social and Economic Research, University of Essex

September 2010

This research has been commissioned by the Government Equalities Office (GEO).The findings and recommendations are those of the authors and do not necessarily represent the views of the GEO.

The authors are grateful to the GEO for commissioning this work and to the Research and Analysis Team in particular for input and guidance throughout.

Executive Summary

This report aims to enrich the study of economic inequality in UK by providing a deeper understanding of the economic well-being of ethnic minority women.A society that aims to be a fair and equal society and to protect the rights of individuals and advance equality of opportunity for all (The Equality Act 2010) must implement policies to achieve that goal, policies whose effectiveness depends on our understanding of the nature and mechanisms of creating and perpetuating inequalities. Inequalities based on gender and ethnicity are some of the key concerns of architects of a fair and equal UK.An understanding of these inequalities, however, is incomplete without looking into the opportunities and constraints that ethnic minority women face because these may be different from what White British women or men in their own ethnic groups do.Additionally, as most children live with their mothers, we can learn about the economic position of children and the poverty risks they face by looking at the economic position and poverty risks of women of different ethnic groups, especially women with children.This report constitutes the first comprehensive attempt to establish the evidence base on ethnic minority womens poverty, economic well-being and economic disadvantage.

In this report we used secondary analysis of survey data.We pooled data from the annual cross-sectional Family Resources Survey (FRS) from 2003/04 to 2007/08 and its derived dataset, Households Below Average Income (HBAI) across the years 2003/04 to 2007/08.This is a nationally representative sample survey of private households in UK with an annual target sample size of 24,000. Our analysis covered households from Great Britain only, due to differences in coding ethnic group in Northern Ireland. Our total sample comprised 103,822 adult men, 116,857aduilt women and 69,142 dependent children.We also used the Millennium Cohort Study (MCS) sweeps 1-4 for section 2.8 of the report. This a longitudinal study of a representative sample of around 18,000 children born in 2000-2001 in the UK, who are followed over time.

Research findings

Our findings cover differences in individual and equivalent household income across women of different ethnic groups and between women and men.They cover the extent of income inequality faced by women of different ethnic groups and the income sources which contribute most to that inequality.And they explore the impact of inequality on poverty by using simulations of more equal scenarios as a heuristic device.The findings cover both all women and women living with dependent children. For the latter we also examine variations in material deprivation and in poverty persistence.

Average economic well-being of different ethnic groups and relative position

We focused on the largest ethnic minority groups in the UK Indian, Pakistani, Bangladeshi, Chinese, Black Caribbean and Black African women and examined their average economic well-being using two income measures: own net income and equivalent net household income.While a womans own income is an indicator of her financial control and personal resources, equivalent household income (net household income adjusted for family structure and size) is arguably a better indicator of her actual economic position.We examined median as well as mean (average) income since mean income is sensitive to extreme values.We investigated poverty rates of these women and how they compared with poverty rates for men, as poverty is a direct measure of relative economic disadvantage.

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Women of all ethnic groups have lower individual incomes than men in the same ethnic groups. Pakistani and Bangladeshi women have the largest gap and Chinese and Black Caribbean women the lowest.

Chinese, Black Caribbean and Black African women have the highest average individual incomes, followed by White British and Indian women, and Pakistani and Bangladeshi women have the lowest.

Men and women with children have higher average individual incomes than those without, and more so for White British, Indian and Chinese groups. But this difference is greater for men than women. Exceptions to this pattern are Pakistani men and women and Bangladeshi women.The broad groupings in rank of individual income remain the same for men and women with and without children.

Womens ranking by individual incomes is different from that by equivalent household incomes, which reflects differences in mens (partners) incomes and number of children across ethnic groups. Chinese, Indian and White British women have the highest average equivalent household incomes, followed by Black African and Black Caribbean women, and Pakistani and Bangladeshi women have the lowest.

Men and women with children have lower equivalent household incomes than those without, except for Chinese men and women.That is, higher individual incomes do not necessarily translate into greater economic wellbeing overall.

Almost all women benefit economically from sharing with others (i.e. mean individual income is lower than mean equivalent household income), with Indian, Chinese and White British women benefitting the most. But Black Caribbean and Black African women gain hardly at all.The gain is lower for women with children.

The general patterns are similar whether we use median or mean incomes, although median incomes are mostly lower than the mean income, since income distributions are heavily skewed to the right, i.e., a large proportion of the group have lower incomes and a few have high incomes.The ranking of Chinese women drops to third place if we look at median individual income instead of mean individual income reflecting very large income dispersion within the group.

Poverty rates are higher for women in all ethnic groups compared to White British men. Pakistani and Bangladeshi women having the highest poverty rates at around 50 per cent.

Indian and Chinese women have higher poverty rates than White British women even though they have similar or higher mean incomes, again reflecting a higher level of income dispersion.

Women with children have higher poverty rates than those without across all ethnic groups.And childrens poverty rates are higher than those of men and women from the same ethnic group.

The average ratio of the individual incomes of women to that of their spouse or partner is higher for Black Caribbean and Black African women than other groups.

Average experience of women relative to each other

The comparison of average economic well-being of one group vis--vis another masks a number of different stories within it as the women in each of these ethnic groups are not homogeneous in terms of their socio-economic characteristics, many of which influence their potential income. In this section we take a look at selected characteristics, namely age and family composition.While age composition has implications for individual income, family composition has implications for both own and equivalent household incomes

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White British women are evenly distributed across different age groups while Pakistani, Bangladeshi, Chinese and Black African women are relatively younger.Women with children are, as expected, comparatively younger.

Income gaps between ethnic groups do not vary much by age except at the extremes and the pattern of mean incomes by age are relatively similar across groups: individual incomes rise steeply to a peak in the middle years and decline sharply after that. Mean household incomes show much less variation across age groups.

In most ethnic groups, the majority of women live in families without children.The exceptions are Bangladeshi, Black African and Pakistani women.

A higher proportion of Black African and Black Caribbean women are lone parents, around 18 per cent compared with six per cent of all women for other groups.

Most Indian, Pakistani, Bangladeshi and Chinese children live with two parents, but only around three quarters of White British children and half of Black Caribbean and Black African children do.

Women of most ethnic groups who are living in couples live with men of the same ethnic group. The exceptions are Chinese and Black Caribbean women: a substantial proportion of these women who are living in couples live with White British partners.

The average number of children per household, among households with children, is highest for Pakistani and Bangladeshi women at between 2.3-2.4 children on average, followed by Black African women at around two children. Other households with dependent children have an average of 1.6-1.7 children per household.

Ranges of Income and womens economic inequalities: between and within group comparisons

Average income measures tell us very little about the experience of all women in the group, unless incom