Why Variance Matters: Race, Education, and Income

Aug 13 2011 Published by under Uncategorized

Lisa Wade is a professor of sociology at Occidental College in Los Angeles. She blogs every day at Sociological Images.

Kelsey C. sent in a some great data from the Bureau of Labor Statistics that helps illustrate why variance matters as much as a measure of the average.  The figure shows the median income by race and education level, as well as the typical earnings of each group’s members in the third quartile (or the 75th percentile) and first quartile (or the 25th percentile).  What you see is that the median earnings across these groups is different, but also that the amount of inequality within each group isn’t consistent.  That is, some groups have a wider range of income than others:

 

So, Asians are the most economically advantaged of all groups included, but they also have the widest range of income.  This means that some Asians do extremely well, better than many whites, but many Asians are really struggling.  In comparison, among Blacks and Hispanics, the range is smaller.  So the highest earning Blacks and Hispanics don’t do as well relative to the groups median as do Whites and Asians.

Likewise, dropping out of high school seems to put a cap on how much you can earn; as education increases it raises the floor, but it also raises the variance in income. This means that someone with a bachelors degree doesn’t necessarily make craploads of money, but they might.

6 responses so far

  • Ed says:

    Or being forced out of high school by abusive parents, thank you. There are plenty of reasons people do not complete HS aside from dropping out.

  • Zuska says:

    Such a great presentation of data, and perfect illustration of why soundbites rarely convey a meaningful bit of information, stripped of context as they are.

  • Isabel says:

    "Hispanic" is not a race. And if you are looking at ethnic groups (not that Hispanic is an ethnic group either), would love to see a breakdown of white ethnic groups (there are remarkable differences to the degree that looking at the white majority in the US as a group is misleading and unenlightening). Also, how much of the variance is due to some members of the group being recent immigrants? Without factoring that out we can't make generalizations about "race".

    This blogger seems to like to just throw out sensationalist, puffed-up factoids. There is no in depth analysis and zero response to comments. I don't know what Zuska is talking about - I learned nothing new from this post.

  • SCJ says:

    Would be interested to hear more on these findings and their implications. Interesting chart, however.

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