Population Research and Policy Review 16: 115–145, 1997.
1997 Kluwer Academic Publishers. Printed in the Netherlands.
The individual economic well-being of Native American men and
women during the 1980s: A decade of moving backwards
ROBERT G. GREGORY
, ANNIE C. ABELLO
& JAMIE JOHNSON
The Australian National University, Research School of Social Sciences, Canberra, Australia
Department of Economics, University of Chicago, USA
Abstract. The study examines whether the income opportunities of Native Americans over
the 1980s improved in response to stronger aggregate job growth or deteriorated in response
to declining wage and employment opportunities, particularly for the less-skilled. Using data
from the 1980 and 1990 US Census on individuals aged 16–64, a methodology is presented
to analyze the effect of changes in the income distributions of Native Americans and whites
on the average Native American-white income ratio. Oaxaca-type decompositions are also
used to yield insights into the role of economy-wide as opposed to Native American-speciﬁc
effects on changes in income, hourly earnings and annual hours employed over the period.
The study concludes that the economic circumstances of Native American men and women
further deteriorated relative to whites over the decade, chieﬂy due to the declining valuation
given to Native American human capital, particularly for men. An important ﬁnding of the
study is the role of economy-wide vis-
a-vis native-speciﬁc effects: almost all of the adverse
movements in average hourly earnings against Native Americans can be attributed to changes
in economy-wide hourly earnings structures (with the least-skilled being paid less), whereas
the large fall in relative annual hours is due to changes speciﬁc to Native Americans.
Key words: Native Americans, American Indians, Minorities, Income inequality, Wage
The decade of the 1980s was one of the best ever for US employment growth.
Between 1979 and 1989, the employment-population ratio increased from
59.9 to 63.0 percent to reach the highestlevelsince WorldWar II. A commonly
noted characteristic of the US and other wealthy economies is that when job
opportunities grow quickly, the least skilled and those who are disadvantaged
in labor markets are able to do better (Okun 1973). There is a strong up-
draft effect. Low hourly earnings tend to increase relative to the median, and
unemployment falls. Native Americans have always been disadvantaged in
the labor market, and on the basis of aggregate job growth over the 1980s,
their economic position should have improved.
The 1980s, however, were unusual. Despite strong job growth, the labor
market conditions for low-skilled, low-paid men deteriorated. Real hourly