Caribbean Studies Association - University of Floridaufdcimages.uflib.ufl.edu/CA/00/40/01/91/00001/PDF.pdf · Eastern Caribbean Center University of the Virgin Islands LIBRARY UNIVERSITY

Eastern Caribbean Center University of the Virgin Islands

LIBRARY UNIVERSITY OF THE VIRGIN ISLANDS

St. Croix

Presented at The 20th Annual Conference

of the

Caribbean Studies Association Curacao

ABSTRACT

The rapid economic growth of the U.S. Virgin Is- lands during the 1960s and 70s attracted a large number of immigrants from the Eastern Caribbean. Most Virgin Islanders shared in the boom, but there persists a degree of poverty in the population that is more marlcecl among certain groups. Data from a Public Use Microdata Samples 1990 census file were used to analyze the distribution of poverty. The simply interpreted odds-ratio statistic was used to show that educational attainment, marital status, family and l~ousel~olcl living arrangements, the number of workers in the family, age, gender, the presence or absence of children ancl place of birth all significantly impact on the chances of staying above or falling below the poverty line. Logistic regression proceclures were used to predict the chances of falling into poverty by either an imrni- grant householder or a citizen householder. Three variables-eciucation31 attainment, family status rind the presence of children--conrain adequate information for predicting poverty status. Single-parent females, both immigrant ancl citizen, have the strongest likelil~oocl of being poor.

COMPARATIVE LEVELS OF POVERTY BETWEEN U.S. CITIZENS AND CARIBBEAN IMMIGRANTS IN THE U.S. VlRlGN ISLANDS

1. INTRODUCTION

gc:. . he concept of poverty is ap- f .r plicable to individuals, to

families, and to defined groups within a population. It is an important concept because it has relevance for public policy and because it attracts con- siderable political attention. In addition, society considers it worthwhile to have a summary measure of the economic status of those at the lower end of the social order. It is also valuable to have an estimate of how many are poor, what kind of people are poor and how does the poverty rate change over time. Policy makers would also like to know the factors that substan- tively contribute to the state of ineq- uity so that they may meaningfully address them.

Poverty is inherently difficult to define by any generally acceptable standard. This is especially so when one attempts to compare poverty across countries. In fact, the com- monly used concept of poverty in the United States focuses on econonlic well-being and does not take quality- of-life indicators into consideration.

The analysis of the dinlensions of poverty in the Virgin Islands of the United States-St. Croix, St. John and St. Thomas-does not appear to have attracted much attention. With a per capita personal income of $11,052 and an annual average gross pay of $18,984

in 1989, the Virgin Islands stands above almost all other countries throughout the Caribbean and Latin America (Bureau of Economic Re- search, 1991). Mills (1994) used a special census tabulation of Virgin Is- lands data to analyze poverty among immigrants in the Virgin Islands over two time periods, This paper serves to refine the previous study and to extend it to a wider group that includes Virgin Islands natives, U.S.-born in- rnigrants and Puerto Rican in- migrants.

Within the field of migration, assimilation theory predicts that immigrants will generally achieve social and economic gains with their longer exposure to American society, but that there is substantial variation based on the country of origin and milieu into which the immigrant settles. It is further postulated that first-generation immigrants are handicapped by their newcomer status and are rarely expected to achieve socioeco~~omic par- ity with the native population (Hirsch~nan, 1995, p. 691).

However, the changing character of the American economy over the last two decades has led to a decline in opportunities for upward mobility of migrants and their children. Mills showed (1994) empirically that the classic hypothesis of longer residence in the Virgin Islands does not neces- sarily lead to socioeco~~omic progress.

Nor does it automatically lead to the narrowing of economic differentials between immigrants and the Virgin Islands-born or U.S.-born population.

Assimilation in the traditional sense can no longer be taken as given. In fact, there is reason to believe that segmented assimilation-denoting varying modalities of incorporation into distinct sectors of American society-and downward assimilation-a process defined by the incorporation of immigrants into impoverished groups whose members display adver- sarial stances toward mainstream be- haviors-directly result from this shift in the economic base (Fernandez-Kelly and Schauffler, 1994).

In this paper, the economic per- formance of East Caribbean immigrants as measured by their level of poverty will be revisited and compared with that of citizens'. The work is divided into six sections. The second section addresses the broad extent of poverty in the Virgin Islands, and the third discusses the relationships between a set of selected variables and poverty for all householders. In the fourth section, the rnultiple logistic regression rnodel is used to analyze data on poverty from the 1990 census of population and housing for U.S. citizens and Eastern Caribbean immigrants separately. The results of the models are used to predict the chances of a householder falling below the poverty line in each group. Section five presents an explanation of the Hows and IlVl~ys of poverty among the two groups in the territory, and the fi-

In this study, n citizen refers to n native-born Virgin Islander, n U.S. mninlantl-born in-migrant or n f'uerto Ricnn in-migrnnt.

nal section offers suggestions that might guide policy formulation relative to the long-term reduction of poverty.

2. POVERTY IN THE VIRGIN ISLANDS

2.1 The Measurement of Poverty The official definition of poverty

that is used in the Virgin Islands is the one defined by the federal government. This was first developed in 1965, and despite its several shortcom- ings\ it is still the primary index that is applied in the United States. The official poverty line, established by the Office of Management and Budget, was set at three times the cost of ob- taining a minimally adequate diet. The index makes use of a series of income thresholds that are set in relation to needs, determined by the size of family, the number of children, and age of the householder. These thresholds are updated evely year to reflect changes in the annual average Con- sumer Price Index. The thresholds used in the United States are the same for the Virgin Islands.

A fa~nily is considered poor if its income is below the threshold for its size, and a fanlily with an income over the threshold is counted among the non-poor. Poverty status is also determined for all individuals3. Only cash income is counted towards the index, and it does not include in-kind food, housing subsidies and medical

For a ventilntion of this subject, see the invitetl papers on hfeclsrtrirtg F'owrty by the American Statistical Asso- cintion (1991).

Poverty is not tleterminerl for inmntes of institutions, persons in military group quarters nntl in college tlormi- tories, nncl unrelntetl indivitlunls under 15 yenrs old. (l7.S. Bureau of the Census, 1993, p. B-23.)

Table I . Poverty Status in 1979 and 1989 of Families and Persons

Virgin Islands St. Croix St. John St. Thomas

1990 1980 1990 1980 1990 1980 1990 1980

Income Levels in 1989

Families 23,012 20,855 11,201 10,698 769 518 11,042 9,639

Persons 100,689 95,649 49,581 49,319 3,487 2,430 47,621 43,900

Income below poverty level: 5,349 5,893 3,308 3,336 89 113 1,952 2,444

Families 23.2 28.3 29.5 31.2 11.6 21.8 17.7 25.4

Percent below poverty level 27,334 31,958 16,686 17,958 523 603 10,125 13,397

Persons

Percent below poverty level 27.1 33.4 33.7 36.4 15.0 24.8 21.3 30.5

Source: Geneml Socinl and Ecol~onric Clrnmcterislics, PC80-I-C55. Tables 30 and 45a: Social rr~rrl Ecor~on~ic Cl~nmcteris- tics, 1990 CP-2-55. Tables 23 nncl 102. (1I.S. Bureau of the Census).

care assistance provided by the federal government.

2.2 The Poverty Status of Persons and Families

The average poverty threshold for a family of four persons in the Virgin Islands was $7,412 in 1979 and $12,674 in 1989: Data from the 1990 Virgin Islands census of population and housing show (Table 1) that about 23 percent of all families in the Virgin Islands were below the poverty line and about 27 percent of all persons were also classified as poor. In the United States, the poverty rate was 11.7 percent in 1979 and 13.5 percent in 1990 (United States Bureau of the Census [USBC], 1993a, p. 28) . The indices for the Virgin Islands show

about a five percent decrease from 1980 data when they were about 28 percent and 33 percent respectively.

The economic disparities between the islands is reflected in the poverty rates. In both 1979 and 1989, St. Croix posted the largest percentage of families and persons in poverty, and St. John the least. While St. Croix families showed the smallest decrease-by about 2 percent-from about 31.2 in 1979 to 29.5 in 1989, the poverty rate in St. John decreased by 10 percent and was almost halved- from about 22 to 12 percent. In St. Thomas, the poverty rate was reduced by about 7 percent. It is noted further that the rate of poverty in St. Croix was almost three times that in St. John in 1989. Within the forxner island, poverty rates ranged from 9.6

4The yenrs 1079 nntl 1980 were the yenrs fur which in- percent in the East End subdistrict to come dntn were obtninetl during the 1980 nntl 1990 censuses. 51.8 percent in the southeast Frederik-

Table 2. Poverty Status in 1989 of Families and Persons by Place of Birth

Virgin United Puerto Other Total Islands States Rico Caribbean Elsewhere

All Income Levels in 1989:

Families 23,012 6,670 3,337 1,393 9,179 2,433

Persons 100,689 49,061 14,135 3,952 25,489 8,052

Income below poverty level:

Families 5,349 1,518 289 464 2,518 560

Percent below poverty level 23.2 22.8 8.7 33.3 27.4 23.0

Persons 27.334 15,559 1,179 1,212 6,988 1,784

Percent below poverty level 27.1 31.7 12.7 30.7 27.4 22.2

Source: Detr~ilerl Cross-T<~bulntio~~sfor tlle l1.S. Virgil1 Islrr~~rls CPH-L-156, ([J.S. Bureau of the Ce~~sus ) .

sted subdistrict, while in St. Thornas the ranges were from 2.0 percent on Water Island to 22.4 percent in the Southside subdistrict (USBC, 1993c, Table 125). An explanation of these disparities is offered in section five below.

2.3 Povertv Status bv Place of Birth , -I

Given that socioeco~lomic nlobility is the primary goal of most emigrants, it is worthwhile to compare the economic status of East Caribbean irnmi- grants and US citizens. These latter include Virgin Islands natives, US- born in-migrants, and Puerto Rico- born in-migrants.

The data in Table 2 reveal that

rates-about 40 percent of them- compared to immigrants from the nearby British Virgin Islands with about 19 percent, followed by Kitti- tians and Nevisians with about 28 percent (USBC, 1994, p. 61).

The data confirnl that with the exception of Puerto Ricans who are citizens of the United States, immigrants from the Eastern Caribbean constitute the largest group of poor persons within the Virgin Islands. In the following section, additional data are presented on select socioecono~nic variables which will help to begin the process of the elaboration of poverty anlong immigrants.

United States in-migrant families 3. RELATIONSHIP BETWEEN have the lowest poverty rate-about 9 POVERTY AND SELECTED percent-compared with that of Puerto VARIABLES Ricans with 1 out of every 3 fanlilies living in poverty. About 23 percent of 3.1 Educational Attainment native-born Virgin Islanders live below There are nuInerous references in the poverty line. Arnong the imnli- the socioeco~~o~nic literature that grants from the Easter11 Caribbean, demonstrate the inlpact of education St. Lucian families have the highest

Table 3. Relationship Between Educational Attainment and Poverty Status: 1990

Poverty Status Educational Attainment Below Poverty Above Poverty Total

Elementary

Junior High School 36 64 544

High School 32 68 587

High School Graduate 19 81 649

Some College 1 1 89 501

College Graduate 05 9 5 443

Total Count 2,833 S o m e : Cou1lt.s 61s taken flom the Public [Ise Mjcrorl~~tcr Srm>l~les: Virgi~l 1slo11d~ oftlle Zl~lited Stntes. [U.S. Bureau of

the Census).

on income and the quality of life in general. Mills (1994) showed with a limited Virgin Islands data set that there is a distinct measurable effect of education on poverty among i~nrni- grants, and this variable is again exam- ined in more detail.

In 1990, 56 percent of all Virgin Is- lands residents 25 years and over were classified as high school graduates or higher. Fifty-eight percent of native- born Virgin Islanders had achieved high-school graduate status or higher, and so did 92 percent United States- born in-migrants, 38 percent Puerto Rico-born in-migrants, and 40 percent of other East Caribbean immigrants. Among the latter, Kittitians and Ne- visians were highest with 43 percent, and St. Lucians were lowest with 27 percent (USCB, 1994, p. 52). The pattern of relatively lower educational attainment rates among i~ll~nigrants frorn other Caribbean islands repeats itself.

In Table 3, the data confirm that in the population as a whole, there is an apparent association between educational attainment and poverty. The higher the education level, the lower is the poverty rate, and the lower the attainment level, the higher is the level of poverty. Thus, among those who had not progressed beyond elementary grades, 43 percent of them were poor, compared to 5 percent among college graduates.

In light of the analysis to follow, it is useful to determine at this point the strength of association that there is between educational attainment and poverty. A well-tested statistic for this kind of analysis is the odds ratio (Christensen, 1990; Hosmer and Le- meshow, 1989). It ~nakes use of odds, a concept that is easily understood by laymen.

Table 4. Cross-Classification of Educational Attainment and Poverty Status: I 990

Educational Attainment

Poverty High School College Status Elementary Junior Some Graduate Some Graduate

Below 47 195 191 121 5 3 24

Above 62 349 396 528 448 41 9

Total 109 544 587 649 501 443

Odds Ratio 1 .OO 1.36 1.57 3.31 6.41 13.24

Pr. > Chi Sq. 0.1522 0.0334 0.0001 0.0001 0.0001

95% CI (0.89, 2.06) (1.04, 2.38) (2.16, 5.07) (3.99, 10.29) (7.56, 23.16) Source: Counts are taken from the Ptrblic llse Micmrlnto Snz~~ples: Virgi11 1sln1,rls offlle Illlited Stcrfes. (L1.S. Bureau of the Census).

The data set that is used in the rest of the analysis below is extracted from the Public Use Microdata Samples (PUMS) file on the Virgin Islands pre- pared by the Bureau of the Census (USBC, 1993b). This is a probability sample of households and persons within those units as recorded in the 1990 census of population and ho~rs- ing. This file is not disaggregated by any level of geography, but contai~ls all the information asked at the household and person level. The unit of interest in this study is the householder.

Table 4 presents data on educational attainment cross-classified with poverty status. Householders with elementary education were used as the referent group.

There appears to be no significant difference between householders at the elementary and junior-high school levels in regards to their poverty status. This is determined from the odds ratio for the latter group whose

probability of chi square at 0.152 is greater than the acceptable level of 0.05. However, poverty occurs about 1.6 times more often among householders with elementary education than householders with some high school education. Similarly, the odds of being below the poverty line are about 1.6 times higher among householders with elementary education than among householders with some high school education. High school graduate householders with diplomas are about 3.3 times more likely to be above the poverty line than householders with elementaiy education.

The odds ratios for colIege- educated householders are notably larger than those of the preceding groups'. Householders with some college education and others with (four- year) college degrees are about 6 and 13 times respectively less likely than elementaiy school householders to be in poverty. The fact that the odds are greater than one in all cases except that of the junior high school house-

Table 5. Relationship Between Marital Status and Poverty Status: 1990

Poverty Status

Marital Status Below Poverty Above Poverty Total

Never Married

Separated

Divorced

Widowed 3 1 69 237

Consensually Married 28 72 98

Now Married 15 8 5 1,489

Total Count 3,204 Source: Counts are taken f ~ ~ m the Prrblic Use Micmclotcr Snoililes: Viqill 1slcc11cls of the Ilnitecl Stcrtes, (U.S. Bureau of the

Census).

holders indicates that the probability of being above the poverty line is greater than 50 percent (and this trans- lates into a chance or a probability of 1.0 versus 0.0.)

3.2 Marital Status The national trend, reflected in the

Virgin Islands, is that men and women are waiting longer to marry. In the United States, the median ages at first marriage in 1970 and 1992 were 20.8 and 24.4 years respectively among women, and 23.3 and 26.5 respectively among men. 111 the same period, marriage rates declined from 72 to 61 percent, and the unmarried rates increased from 28 to 39 percent. Only 3 out of 4 black women will ever marry sometime during life, compared to 9 out of 10 white women. At the same time, there are Inore unmarried men

than women below age 40, after which the pattern is reversed. Between 1970 and 1992, the percent of never married women between wornen 20 to 24 years increased from 35.8 percent to 65.7 percent. Added to this, 4 out of 10 marriages are likely to end in divorce (USBC, 1993a, p. 20, p. 22). These demographic changes influence capital for~nation at the household level, and are likely to have a significant i~npact on the persistence of poverty.

In the Virgin Islands in 1990, never-married householders made up the largest group of householders classified by marital status (Table 5 ) . About 3 out of 10 householders who were never married or separated ex- isted below the poverty line, and so did 28 and 24 percent respectively of co~~sensually married and divorced.

Table 6. Cross-Classification of Marital Status and Poverty Status: 1990

Marital Status

Poverty Never Consensually Status Married Separated Divorced Widowed Married Now Married

Below 221 5 9 115 73 27 21 8

Above 51 1 115 359 164 71 1,271

Total 732 174 474 237 98 1,489

Odds Ratio 1 .OO 0.84 1.35 0.97 1.14 2.52

Pr. > Chi Sq. 0.3406 0.0251 0.8590 0.5920 0.0001

95% CI (0.59, 1.20) (1.04, 1.76) (0.71, 1.34) (0.71, 1.82) (2.04, 3.12) Source: Counts are taken from tile Public llse Microdoto Scmrples: Vijgij~ Islrce~ds of the Llc~ited States. (L1.S. Buleau of the

Census).

Table 7. Relationship Between Family Status and Poverty Status: 1990

Poverty Status

Family Type Below Poverty Above Poverty Total

Female Living Alone 34 66 341

Female Not Living Alone 22 7 8 6 3

Male Living Alone 15 85 410

Male Not Living Alone 8 92 90

Female Householder 40 6 0 744

Male Householder 20 8 0 208

Married Cou~ le 13 87 1 -348

Total Count 3.204 Source: Counts ale taken fioin tlie Ptrblic llse Micrvdotrr Srcj~~ples (Virgil1 Islcer~cls of the llr~itecl Strrtes), L1.S. Bureau of the

Census. 1003b.

Never-married householders were ~arat ive PurPoses. Table 6 shows that used as the referent group for corn- never-married and separated house-

Table 8. Cross-Classification of Family Status and Poverty Status: 1990

Poverty Female Male Householder Married Status Alone Not Alone Alone Not Alone Female Male Couple

Below 117 14 63 7 297 42 173

Above 224 49 347 83 447 166 1,175

Total 34 1 63 41 0 90 744 208 1,348

Odds Ratio 1 .OO 1.83 2.88 6.1 9 0.79 2.06 3.55

Pr. > Chi Sq. 0.0624 0.0001 0.0001 0.0778 0.0005 0.0001

95% CI (0.97,3.45) (2.03, 4.08) (2.77, 13.83) (0.60, 1.03) (1.38, 3.10) (2.70, 4.67) Source: Cou~lts ale taken from the Public Ilse Microclntc~ Samples (Virgil, Isla~~cls of the ll~lited Str~tes), U.S. Bureau of the Census.

holders had almost the same odds of falling below the poverty line as indi- cated by the odds ratio of 0.84 for the latter which is not statistically significant. Divorcees, however, have only marginally better odds than either of the never marrieds or the separated householders given that the lower limit of the 95 corlfiderlce interval is barely above 1.0 at 1.04. Both widowed and conse~lsually married householders show 110 significantly better odds of escaping poverty than never marrieds.

In fact, the evidence is that only married householders have more than a 50 percent chance of rising above the poverty level. Table 6 indicates that the odds of this group escaping poverty are about 2.5 times greater than those for never-married householders.

The data indicate that the changes that are now taking place relative to marital status are having a negative impact on the accumulation of wealth and poverty status. This will be ex-

plored further in sections four and five.

3.3 Family Status and Living Arrangements

In the section above, it was suggested that significant changes had taken place over the last 15 years in the marital status of adults. These changes logically extend to living arrangements. In the Virgin Islands, the percentage of married-couple families was reduced from 65.3 in 1980 to 42.1 in 1990, and that of female householders-whether living alone or not alone-rose from 28.7 percent to 35.8 percent. These recent living arrangements appear to exhibit even greater influence on poverty levels than does marital status.

In Table 7, female householders show the highest rate of poverty compared to all other groups. In fact, the poverty rate among female householders-40 percent-is twice that axnong male householders-20 percent.

Table 9. Relationship Between Number of Family Workers and Poverty Status: 1990

Poverty Status

Number of Family Workers Below Poverty Above Poverty Total

None 7 3 27 224

One 34 66 786

Two 7 93 952

Three or more 4 96 338

Total Count 2,300 Source: Counts are taken fiwn the P~rblic llse Mic~vtlntn Snn~l~les: Virgin 1slr111rls of the Zl~rited States. (I1.S. Bureau

of the Census).

Table 10. Cross-Classification of hrurnber of Family Workers and Poverty Status: 1990

Poverty Number of Family Workers Status None One Two Three or more

Below 163 26 5 69 15

Above 6 1 52 1 883 323

Total 224 786 952 338

Odds Ratio 1 .OO 5.25 34.20 57.54

Pr. > Chi Sq. 0.0001 0.0001 0.0001

95% Cl (3.78, 7.30) (23.32, 50.15) (31.72, 104.36) Source: Counts are taken fioln tlie Public Use Micmd~trr Snn~ples: Virgil] lsln~~rls oftl~e 1111iterl States, (I1.S. Bui-eau

of the Census).

The female households are most ing alone have the lowest incidence of likely to contain children and may ex- poverty-8 ~erce~ l t - i~ l this group, fol- plain the high incidence of poverty lowed by married-couple families with among them. Fe~nales living alone- 13 ~ e r c e ~ l t . 34 percent-have a poverty rate that is The odds of females living alone more than twice as high-15 percent- and females not alone and falling into as females living alone. Males not liv- poverty are about the same (Table 8).

Females living alone is used as the referent group. Thus, whether males live alone or not alone, the former are about three times less likely to fall below the poverty line than females living alone, and males not living alone are about six times less likely to be poor than females living alone. Fe- male householders, possibly with children, have a smaller chance of escaping poverty-with odds of 0.79:l- than females living alone. And as might be expected at this time, the odds are that ~narried couples have about 3.6 times more chances of avoid- ing poverty than does the referent group.

The importance of family, living arrangements, and family size relative to poverty and the implications for social policy suggest the need for a deeper understanding of the factors that are at work. To this end, the data were elaborated further and are shown in Tables 9 and 10.

Given the rnethod of the computa- tion of the poverty line by the federal government, it is expected that the larger a household's irlcor~le as a function of the number of workers, the greater the chances one has of living above the poverty line. Table 9 illus- trates that there is a direct relationship between the number of workers in a fa111ily and its poverty status. Of all the families in which there are no workers, about 7 out of 10 of the111 exist below the poverty line. For those with one worker, about 3 out of 10 are in poverty, and less than 1 in 10 are below the line in families with 2 or more workers.

The strength of the association between the number of workers and pov-

erty status is shown by the odds ratios in Table 10.

The presence of children (under 18 years) in a family also exerts its influence on the financial health of that family. Table 11 shows that of all the families with one or more children in the Virgin Islands, about 6 out of 10 of them are identified with poverty. A household with children is about twice as likely to be in poverty as one without.

T(lhle 1 1 . Relutionship Between Children in the Fumily ant1 Poverty

- -- -

Poverty Status Presence of Children Below Above

% Oh None 3 9 5 5

One or more 61 4 5

100 100

Total count 3,204

Odds ratio = 1.941

95% CI: (1.637, 2.301)

3.4 Age, Gender, Place of Birth and Poverty Status

"The depressed economic condi- tion of mother-header as opposed to father-headed households indicates that gender is a powerful predictor of poverty" (Kissman and Allen, 1993, p. 10). It is further suggested that teenage births reduce the earning power of women by hindering the full development of their career capacities. Added to this, it was shown earlier that there exists a substantive relationship between place of birth and poverty.

Table 12. Poverty Rates Disaggregated by Age, Place of Birth, and Sex of Household- ers With Children Under 1 8 Years: 1 990

Percent Below the Poverty Line

Caribbean Immigrant Born in the VI, USA or PR

Age of Householder Males Females Males Females

Total 22 44 13 34

The variables just mentioned are cross-tabulated to flesh out the relationships that exist in a preliminary way. The age group beginning at age 27 was chosen for the single reason that Kissman and Allen (1993, p. 10) stated that women who bear children at age 27 or older earn 37 percent higher incomes than do women who become parents by age 20. Persons below the poverty line were divided into two groups according to place of birth-Eastern Caribbean foreign-born and U.S. citizens-and these were further categorized by gender.

With the exception of ~nales under 21, the poverty rate for females is higher at all age categories for both groups identified by place of birth- Table 12. Poverty is lowest for all males and East Caribbean females in the 55-64 age category, and is lowest for female citizens in the 45-54 age

category. When displayed graphically (Figure I), the data show that the gap between males and females among immigrants is noticeably smaller than that between U.S.-born ~nales and females below poverty.

A children effect might explain the data. It is expected that at younger ages poverty would be higher because of low capital accu~nulation and also because of the burden that children impose. This generally negative relationship was demonstrated in Table 11 above. The pattern that is graphed may also be partly explained by the fact that increasing numbers of adolescent females are burdened by child rearing and concomitant expenses, whereas males tend to withdraw from this encumbrance by living separately.

Figure 1

POVERTY RATES BY AGE, SEX, AND STATUS: 1989 Single-Parent Householder With Children Under 18 Years

Age of Householder

- - Immigrant Male -Immigrant Female

27-44 45-54

Age of Householder

- - Male Citizens -Female citizens 1

4. ANALYSIS OF POVERTY

4.1 The Data The data used in the following

analysis derive primarily from the Public Use Microdata Samples (PUMS) computer file. This 10 percent probability sample of records was pro- duced from the Virgin Islands 1990 census of population and housing by the U.S. Bureau of the Census. In this microdata set, the basic unit is the housing unit and the persons who live in it. It is not possible to identify any household by its address or the island on which it occurs.

4.2 Operational Definition of Vari- ables

The Depen den t Varia bl-overty Poverty is defined in section 2.1

above. In the analysis below, it is used as a dichotomous variable. Hous- ing units with a total income below the threshold of 100 percent are classified as "below the poverty level", and those with an income cutoff equal to or above 100 percent are "above poverty".

Place of Bid1

Some analyses were performed where the data are divided into two

The data in the file are subject to place-of-birth categories. One group

the usual set of limiting factors- consists of im~nigrants from the East-

introduced during data collection and ern Caribbean, irrespective of ixn~ni-

processing-that are associated with gration status, and the other of United

censuses and samples such as sam- States citizens-that is, persons born

pling and nonsa~~lpling errors. in the United States, the U.S. Virgin Islands, or Puerto Rico.

A subset of the data was extracted and contain information 011 occupied Family or Housel~old Type housing units. Data on each housing unit consist of its poverty status, the household or family type, and the presence of persons under 18 years, as well as on the householder, hislher place of birth, educational attainment, gender, and 111arital status.

The total number of households in- cluded in the analysis for the Virgin Islands as a whole is 3,204. When subdivided into place of birth, there are 1,639 households in the citizens group and 1,134 in the Eastern Carib- bean group-both of which are defined below.

Descriptions of the dependent variable-poverty status-and of the variables that are employed as regressors are presented in the following section.

Families are classified by type as: a married-couple family; a male householder-with no spouse present, either living alone or not alone; or a female householder-with no spouse present, living alone or not living alone. It was determined that this variable was a stronger predictor of poverty than marital status, thus family type was used instead. Three categorical dummy variables are used for fa111ily type, and the referent category is that of female householder.

Education a1 Attainment The impact of education on poverty

is well established, and four categorical dummy variables are created to capture this effect. The first is a householder who is a college graduate,

Table 1 3. OLS Regression Estixnates

Correlation Parameter Probability Standardized Variable Mean Coefficient Estimate > i t 1 Estimate

t o r r ~ t Idarne&'~ou~le 0.4207 u.1~30 8.1f38 818881 8;9488 Male Householder 0.2207 0.0824 0.1412 0.0001 0.0974

College Graduate 0.1 576 0.1 779 0.2283 0.0001 0.1 887

Some College Edn. 0.1 751 0.1260 0.1928 0.0001 0.1747

High School Diploma 0.2272 0.0502 0.1440 0.0001 0.1477

Number of Workers 1.61 0 0.461 7 0.1 938 0.0001 0.3971

Presence of Children 0.4856 -0.1 362 -0.0993 0.0001 -0.1 122

Ane 46.1 0.01 80 0.0036 0.0001 0.1201

df = 8 F-value = 137.045

Adiusted R-sauare = 0.3213 Prob > F = 0.0001

the second has some college educa- above or staying above the poverty tion, the third is a householder with a level will increase with age. high school diploma, and the fourth is Presence of Clzildren a householder who did not graduate from high school. This latter category The data on the presence of chil-

is enlployed as the referent group. dren in a household is presented in dichotonlous form: uresence or ab-

Nrimber of Workers in tlze Famil-y A worker is defined as anyone 16

years old and over who worked one or more weeks during 1989. The income of all workers contribute to total family inco~lle on which poverty status is primarily based. The range of the data for this variable is from 0 to 3 or more workers.

Age The use of age permits an analysis

of the changing chances of poverty with the age of the householder. It is anticipated that the chances of rising

I

sence. It is assumed that households with children will negatively impact poverty status, primarily among younger householders because of the burden of the cost of child rearing.

4.3 OLS Regression The application of the ordinary

least squares (OLS) regression model to a data set with a dichotor-nous dependent variable may lead to biased standard errors of the coefficients because of heteroscedasticity among the error terms. This in turn makes inter-

pretation of the parameter estimates very difficult.

However, the OLS model is useful because it tends to indicate correctly if the effect of an explanatory variable is positive or negative. In this case, it also lends itself as a convenient method to screen variables by helping to determine the relative significance of the predictor variables and the di- rection of the effect that each one has on the dependent variable-poverty status.

Table 13 lists the results of regress- ing eight independent variables on poverty status using OLS procedures. The adjusted R-square is 0.3213, and the F-value is significantly above the critical level5. All the parameter estimates are statistically significant. With the exception of the presence-of- children variable, all the variables have positive effects on poverty status. The negative sign attached to the presence of children is in keeping with data presented above which indicate that households with children tend to have a greater chance of falling below the poverty level than households without. The last column in the table of standardized estimates provide an indication of the relative contribution of each variable to the nod el. How- ever, in the presence of biased error ter~ns, these indicators could be mis- leading.

Examination of the correlation coefficient matrix signals levels of multi- collinearity among some independent variables. When this is the case, the effects of the collinear variables can no longer be assumed to be independ-

The relntively low vnlue of R-sqt~nre is expectetl in n motlel with a dichotomous tlepentlent vnrinble.

ent. Coefficient estimates are unreli- able and so are the associated t-tests.

The correlation between the number-of-workers variable and the married-couple variable household in the matrix is the largest: 0.297. This suggests that the former is approximating the latter. Moreover, the measurement of the number of workers is that of a truncated continuous variable: it is recalled that its range is between 0 and 3, the last value representing 3 workers and any number above. The correlation between age and poverty is 0.0180, but it is -0.294 with the presence-of-children variable. Following the suggestion of Kleinbaurn (1994, p. 165 and p. 168) that the researcher should be guided by the research literature and that "variables may be omitted from consideration if multi- collinearity is found", the decision was made to eliminate both the number-of- children and the age independent variables.

4.4 Logistic Regression

4.4.1 The Model

Logistic regression is ideal for modeling relationships in which the dependent variable is dichotomous and the covariates are corltinuous and/or categorical explanatory variables. It provides a test for the significance of a given explanatory variable while controlling for all other predictors in the model. In addition, it also permits a test of significance of a subset of predictors, controlling the effects of others?

See Hosmer nntl Lemeshow (1980), Demnris (1992) nntl Iileinbnum (1094) for extensive tliscussions of the logistic regression model.

Table 1 4: Multiple Logistic Regression Models Using the Variables Education a1 Attainment, Family Status, and the Household Presence of

Children Under 1 8 Years

East Caribbean Immigrants

Parameter Pr > Standardized Estimate Chi-Sauare Odds Ratio Estimate Probabilitv

Intercept 0.221 7 0.1 177

College graduate 2.5708 0.0001 16.322 0.31 70 0.942

Some college edn. 1.4908 0.0001 5.543 0.2490 0.847

High school graduate 0.8172 0.0001 2.826 0.1919 0.739

Married couple family 1.4526 0.0002 5.335 0.3984 0.842

Male Householder 0.8634 0.0001 2.960 0.1902 0.747

Children under 18 years -0.7216 0.0001 0.607 -0.1 975 0.378

-2 Log-Likelihood = 1247.980

p = 0.0001

U.S. Citizens

Parameter Pr > Standardized Estimate Chi-square Odds Ratio Estimate Probability

Intercept 0.2783 0.0637

College graduate 2.0723 0.0001 10.492 0.4823 0.91 3

Some college edn. 1.4793 0.0001 5.799 0.3440 0.853


Married couple family 1.4985 0.0001 5.91 1 0.4041 0.855


Children under 18 years -0.5907 0.0001 0.732 -0.1621 0.423

- 2 Log-Likelihood = 1277.1 19

There are a number of similarities In the latter, the partial regression co- between OLS and logistic regression. efficients represent the change in the

log odds that is attributable to a unit increase in the value of the predictor variables. Additionally, exponentia- tion of the coefficients produces odds ratios. This odds ratio of the coefficient is a summary statistic representing the partial effect of a given independent variable on the odds, control- iing for other predictors in the model. A measure of fit for the model, the likelihood ratio chi-squared test statistic, is the analog of the global F test. It tests whether any of the independent variables are linearly related to the log odds of the event of interest.

4.4.2 Interpretation of the Results Two logistic regression models are

fitted to the data and the results are shown in Table 14 for Eastern Carib- bean immigrants and U.S. citizens.

The log-likelihood statistic in both models is highly significant with p less than 0.0001. Recalling that this only tells us that at least one of the parameter estimates is not equal to zero, the third column-Pr > Chi-square- confirms the statistical significance of all the variables (except the intercept).

All of the variables have positive coefficients except the presence-of- children variable, and are in total agreement with the results of the OLS model. The positive coefficients indicate that each of the educational attainment and fanlily status variables exerts a positive irnpact in staying above the poverty line.

The estimates for educational attainment signify that householders with college degrees or some college education or a high school diploma are very much higher than for the base case, those with no formal education,

elementary, junior high or incomplete high school education.

Family status estimates also confirm that married couple families and families with male householders or males living alone are significantly higher than for the base case of female householders or females living alone. "

The negative coefficient for a householder with children under 18 years suggests that this person is much less likely to rise above the poverty line than the base case of a householder without children (under 18 years).

The standardized estimates provide an indication of the relative importance of the independent variables in the model. There are two notable dif- ferences between the immigrant group and citizens. First, the relative order of importance of the variables among the former is: married couple farnily status, college education, some college education. Among citizens it is: college education, married couple family status, and some college education. Secondly, the presence of children in households appear to have a stronger influence in immigrant households than in citizen households in pushing householders below the poverty line.

4.5 The Chances of Falling Below the Poverty Line

Results of the logistic regression model can be applied to a forecast of the probability that a particular household with a conlbination of characteristics will fall below or stay above the poverty line. If a predicted probability is less than 0.5 then that probability is said to be zero, and if it is greater than 0.5, it is said to be 1.0.

Table 14: Multiple Logistic Regression Models Using the Van'ables Educational Attainment, Family Status, and the Household Presence of

Children Under 1 8 Years

East Caribbean Immigrants Parameter Pr > Standardized Estimate Chi-square Odds Ratio Estimate Probability

Intercept 0.221 7 0.1 177

College graduate 2.5708 0.0001 16.322 0.3170 0.942

Some college edn. 1.4908 0.0001 5.543 0.2490 0.847

High school graduate 0.81 72 0.0001 2.826 0.1919 0.739

Married couple family 1.4526 0.0002 5.335 0.3984 0.842

Male Householder 0.8634 0.0001 2.960 0.1 902 0.747


-2 Log-Likelihood = 1247.980

U.S. Citizens

- --

Parameter Pr > Standardized Estimate Chi-square Odds Ratio Estimate Probability

Intercept 0.2783 0.0637

College graduate 2.0723 0.0001 10.492 0.4823 0.913

Some college edn. 1.4793 0.0001 5.799 0.3440 0.853


Married couple family 1.4985 0.0001 5.91 1 0.4041 0.855



- 2 Log-Likelihood = 1277.1 19

p = 0.0001

Concomitantly, a prediction of the ex- In applying the logistic equation, act poverty status of a h~useholder predicted probabilities of poverty would then be either 0 or 1. status are shown in the last column of

Table 14. Thus, immigrant householders with any college education or a high school diploma are likely to stay above the poverty line with. probabilities of 0.942, 0.847 and 0.739. A householder in a married-couple family or a male householder has probabilities of 0.842 and 0.747 of escaping poverty. Ceteris puribus, the likelihood is that the households just de- scribed will not fall below the poverty line. On the contrary, a predicted probability of 0.378 suggested that an immigrant householder with children has only a 0.378 chance of staying above poverty, and the likelihood is that this household will be a poor one.

There is a remarkable similarity in the probabilities of poverty status between immigrants and citizens. A college education offers a greater chance to the immigrant of escaping poverty that it does to the citizen. However, a high school diploma appears to be more of a determinant for citizens than it is for immigrants. Conversely, the presence of children exerts more of a negative influence on an immigrant householder than it does on a citizen householder.

5. EXPLANATION IN VIRGIN ISLANDS POVERTY

The advent of large-scale tourism in the Virgin Islands in the late 1950s and the attendant demand for largely unskilled labor induced an influx of immigrants primarily from the Eastern Caribbean. This immigration not only drastically altered the demographic structure of the territory, but it had a notable impact on the economy. In general, as a population increases, it requires more goods and services, and

concomitantly, more resources. In the Virgin Islands, the basic infrastructure, labor pool and capital were available to fuel growth. Economic growth was rapid and substantive, and it propelled the territory from being the poor house of the Caribbean to one with nearly the highest per capita in the Caribbean and Latin America.

At some point during this process of economic growth, it appears that income generation and other resources grew less rapidly than the population, and the number of persons in poverty began increasing. It is also possible that the continuing relatively high incidence of poverty--compared to the United States-is a reflection of an in- equitable distribution of the wealth that is generated. Although poverty is higher among immigrants it still appears to be at an unacceptably high level among citizens.

Most emigrants embark on their first journey because they seek to escape economic hardships at home, and they generally set themselves the goal of improving the quality of their lives. Whether they succeed or not is not just a function of the level of their de- termination, but also of the economic climate of their destination, the level of (educational) skills they bring with them, the values attributed to race and ethnicity in their new home, their age, and the personal-life style that they adopt.

Tourism has been the engine of growth in the Virgin Islands in the last 30 years, and it continues to be so, primarily on St. Thomas. Despite many government efforts to bring the economy of St. Croix in line with that of St. Thomas, there has been no nota-

ble success. Thus, St. Croix continues to exhibit deep pockets of poverty, much of which is associated with de- scendants of Puerto Rican in-migrants who came primarily to work in the sugar industry prior to its collapse in 1966.

The island of St. John benefits from the tourist industry of St. Thomas, but the island is principally .a haven for well-to-do Caucasian retirees from the United States. Income levels are therefore higher and this accounts for the lower poverty rates there that were identified earlier.

Mills (1994) demonstrated empirically the tremendous impact that education has on increasing the life chances of immigrants. The current study confirms the real value of this variable in ensuring a quality life, and it is the one factor which dominates all others. It is notable that up until 1970, the Virgin Islands government did not allow the children of bonded or undocumented immigrants to go to public schools. The long-term effect of this restrictive policy would cer- tainly have worsened the current situation were it allowed to continue.

The data in section 3.1 showed that less than half of the i~nmigrants had obtained a high school diploma. How- ever, there are indications that once in the Virgin Islands, many older immigrants seize the opportunity to qualify for their GED and/or go on to college, opportunities that may not have been available to most of them at home. The analysis above suggests that citizens do not have to depend as much on education as an escape vehicle from poverty, and this is possibly be-

cause they have access to more resources and more opportunities,

The trend in the United States is that households are becoming smaller (with fewer workers per household), the marriage rate is decreasing marriage is being postponed to later life, and the nontraditional household with male and female householders without spouses is becoming more prevalent. These same life-styles are reflected in the Virgin Islands. Given that our analysis has shown that the nontraditional household arrangement is not conducive to capital accumulation, and is second in importance in deter- mining poverty status, this trend does not seem to bode well for an overall improved quality of life.

Married-couple families seen1 to contain a degree of stability and en- durance in the combined income and other resources necessary for an above average level of living. There is a higher home-ownership rate among this family type, for example, and it is likely that it is for the same reason.

All of the foregoing evidence suggests that male householders living alone or not alone have lower poverty rates than females. At younger ages, poverty is more prevalent among male householders because their incornes are s~naller. The poverty rate de- creases toward middle age, but tends to increase again as they approach old age. Most men in these situations do not often have to bear the responsibil- ity of raising children, and in general, their average income still exceeds that of women in sirnilar situations. This is probably what explains the consis- tent higher level de~nonstrated in Fig- ure 1 earlier.

Households headed by females fare worst when compared to married couple families and families headed by males. Adolescent females bearing children often deprive themselves of a completed high school education, and also reduces their capacity to begin the process of building up their capital stock. The need to care for children often makes this whole process more painfully expensive. Even young females who begin motherhood alone in the early 20s do give themselves less than average opportunities to rise beyond the poverty level. And when the number of children increases beyond two at an early age, the chances for a quality life decrease rapidly.

The real difficulty with the nontraditional family style is less a question of morals than it is a need for females to change the environment in which they live rather than adapt to inhospi- table and sometimes hostile circum- stances.

6. CONCLUSION

The poverty rate in the Virgin Is- lands as it stood in 1990 was almost double that in the United States. There was a small decrease in this rate from 1980, but the pervasive percep- tion is that there has been no substantive change during the decade. De- cline in the United States economy during the 1980s and the impact of hurricane Hugo did not help to restore the economy to the productive years of the 1960s and 1970s.

tion to younger residents, this is not as appealing to the older folks in -a gray- ing population.

Many persons in the territory have availed themselves of tertiary and higher education, but a stagnating economy does not lend itself to the ab- sorption of an increasingly skilled labor force.

The increasing participation of females in the labor force has not yet appeared to make a substantive difference in the number who are below the poverty line. Thus far, many younger women have exercised their economic freedom by opting for single parent- hood, but this path is not conducive to a quality life for many.

Policymakers in the Virgin Islands should take note of the salutary effects of education and family formation. Public resources that are used to meet the basic needs of families below the poverty line could best be spent by in- vesting in any form of education and skill development on the one hand, and lasting family structures on the other.

Finally, Kissman and Allen (1993) suggest that like all living organisms, people in their environment form an ecosystem in which each impacts on the other. In this sense, it must be seen that indigence is located neither in the individual family nor in the environment. Instead, they ought to be thought of as the manifestation of ten- sion that is the result of an incongru- ent fit between the two.

At this time, the tourist industry is not marked by vigor, and the rigors or unemployment are keenly felt in St. Croix. While emigration to the United States presents itself as an op-

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