What's Policy Got to Do with It? Race, Gender & Economic Inequality in the United States

Introduction

In the United States, racial and gender identity are correlated with wide disparities in economic outcomes. While women earn less than men on aggregate, Black and Latinx women fare worse than both white women and Black and Latinx men in terms of income, wealth, and employment. Yet, most scholars lack a critical understanding of how social policies like SNAP, TANF and Medicaid, as well as economic policies like minimum wage and workers compensation, affect women’s economic positioning by race. This study adopts an intersectional approach to address this gap, and assess the role of social and economic policies in producing and reducing racialized and gendered inequality.

This study specifically seeks to analyze the relationship between state-level policy levers and economic outcomes for women of multiple racial identities. The authors choose public policy as the instrument of change because it is uniquely vital to addressing and solving inequality; and it is amenable to change and reflective of local government. Notably, the authors do not seek to make any causal inferences about these relationships, only to identify whether economic outcomes vary by race among women receiving similar social and economic support. Given the significance of these policies, the authors seek to understand whether they are uniformly predictive of economic status for women of various racial backgrounds.

Dr. Jamila Michener is an Associate professor in the Department of Government at Cornell University and Co-Director for the Cornell Center for Health Equity. Her research focuses on poverty, racial inequality and public policy in the United States. Dr. Margaret Teresa Brower is a postdoctoral fellow at Harvard University with the Inequality in America Initiative. Her research investigates how institutions reproduce inequities, particularly across intersecting identities of race, ethnicity, class, gender, and sexual orientation.

Methods and Findings

The authors first explore the landscape of economic inequality among Black, Latina, and white women across four dimensions: educational attainment, employment status, earnings, and poverty level.

• The findings reveal wide disparities in educational attainment (i.e. bachelor’s degree) with white women leading the way at 34%, compared to Black women at 24%, and Latina women at almost half the rate of white women’s educational attainment, at 18%.
• In employment, white women maintained the lowest unemployment rate at 4.2%, followed by Latina women at 6.3%, and Black women at 7.8%.
• The researchers also documented similar patterns across earnings and poverty rate. White women fare better on both accounts, earning $814 per week and having the lowest poverty rates at 11.7%, less than half as likely as Black and Latina women to be living in poverty.
• Black women in the study, on average, earned $673 per week and had a 25.7% poverty rate. Latina women earned $618 per week and had a 24% poverty rate.

Next, the authors created an economic status index from individual data of over seventy-five thousand Black, Latina, and white women from the Annual Social and Economic Supplement of the Current Population Survey (CPS). They used multivariable regressions to identify correlations between individual economic status and state-level policies, and found:

• Among state social policies that ensure access to material necessities, levels of TANF benefits and state provision of public health insurance were positively correlated with economic status for unemployed Latina women.
• Levels of SNAP benefits were moderately positively correlated with economic status for employed white women.
• Expansiveness of WIC policy was significantly positively correlated with economic status for unemployed Black and white women.
• Among economic policies that support labor force participation, state minimum wages above the federal minimum wage were significantly positively correlated with economic status for both employed and unemployed white women.
• Higher state earned income-tax credit rates are positively associated with improved economic status for employed Black and White women, and even for unemployed Black women. However, the same is not true for Latina women.
• State unemployment compensation was marginally negatively correlated with unemployed Latina women’s’ economic status.

Ultimately, the authors analyze and name the disparities that are produced for women across lines of race when social and economic policies are implemented. Among racialized sub-groups of women, policies have unequal impact, and demonstrate that state-level decision making on resource allocation actively impacts lived experience.

Conclusions

Given prevalent economic harm facing women of color in the United States, equitable poverty reduction and economic mobility efforts require an intersectional approach. Specifically, the authors propose that future scholars build on their work to identify specific leverage points to better address racialized gaps in outcomes of target populations of social and economic policies. The authors acknowledge that this study is limited by its lack of causal analysis. To build on the body of intersectional policy analysis, future research must continue to evaluate variance in policy effectiveness across racial groups and the design choices and incentives behind critical social and economic policies.

Additionally, the authors chose an idiosyncratic post-recession year both for ease and its theoretical value. They maintain that this is important for understanding how policy operates when women are most vulnerable in the larger economy. However, this situational factor fails to provide an understanding of what happens when the economy is considered ‘stable.’