Why Do Indians Succeed More in the U.S. Than in India?

The answer lies in three levels of selection in immigration.

Posted Oct 15, 2018

"Isn’t it interesting that countless immigrants and their children have prospered in our country while they barely eked out a living in their homelands?" - Dr. Thomas Stanley.

Flag Waving/ Rawpixel/ Unsplash/ Licensed Under CC BY 2.0
Source: Flag Waving/ Rawpixel/ Unsplash/ Licensed Under CC BY 2.0

Recently, I participated in a roundtable event with high-ranking educators from India and successful Indian-American business leaders. The topic we discussed was, “Why are Indians who immigrate to the United States more successful professionally than those who remain?”

The question makes two significant assumptions. First, it assumes that Indian immigrants are more successful than those who don’t immigrate. And second, relevant to this blog, at least part of the explanation is believed to be psychological (which is why I was invited to participate in the event).

In this post, I want to unpack this question. To make the discussion manageable, I’ll focus only on Indian immigrants to the United States, even though the total Indian diaspora is far greater and widespread, and other US immigrant groups are bigger.

Are Indian immigrants to the US successful?

The answer is clearly “yes” no matter which benchmark we use. More than 75 percent of current first-generation Indian-Americans have immigrated to the United States since the 1990s. They make up only about 1 percent of the US population (3.9 million as of 2017) but have disproportionate numbers of professionals such as physicians, corporate executives, and successful entrepreneurs. Their median annual household income is $100,000, which is significantly higher than other immigrant groups or the US population as a whole.  

If we compare these numbers to Indian non-immigrants, the income differences are even larger. As an example, college-educated Indians in India have a household income that is a small fraction of $100,000. Based on these statistics, it seems fair to say that as a group, Indian immigrants to the US are financially successful.

(Note that financial success does not mean success in other life domains. Do Indian immigrants have more fulfilling social lives? Are they more content? Or to drop the H-word, are they happier? These questions are equally important. I’ll address them in future blog posts).

Why are they successful?

They came to America’s shores with only the clothes on their backs and hope welling in their hearts. They slogged away for decades in obscurity and misery, grasping every sliver of opportunity. They lifted themselves up by their bootstraps out of American gutters. Time passed, watered by the sweat streaming off their backs. They scrimped, they saved, penny after penny. After decades of blinding toil, they were earning six-figure incomes. America transformed the huddled unwashed masses of Indians who reached its shores into prosperous business leaders and yuppies who shone as “model immigrants.”

Alas, riveting and uplifting as such a narrative sounds, it is false. The fact is the success of Indian immigrants can be attributed to a three-level selection process. The first level is education. According to the Immigration Policy Institute, 77 percent of Indian American adults have a college degree. In comparison, only 29 percent of all immigrants and 31 percent of native-born Americans are college graduates. Very few uneducated Indians make it to the US. Organizational psychologists even have a name for this type of immigrants, they are called “qualified immigrants.”

Modern Indian Woman/ Gleb Lukomets/ Unsplash/ Licensed Under CC BY 2.0
Source: Modern Indian Woman/ Gleb Lukomets/ Unsplash/ Licensed Under CC BY 2.0

The second level of selection is the arduous and lengthy immigration process. Most first-generation Indian-Americans come to the US as students, go on to get a job with an H1-B visa (which involves a lottery), and eventually, after many years, become permanent residents and then US citizens. The entire process is fraught with uncertainty. It vets aspiring immigrants. The people who hang in there from beginning to end are optimistic and gritty. What’s more, because they come as students, they have more opportunities to interact with native-born Americans and consume American culture from their very first day on American soil than other immigrants. This helps them to assimilate and build social capital along the way (if they want to).

The third and perhaps the most significant selection is in who the immigrants are. As authors Amy Chua and Jed Rubenfeld point out, “the great majority of Indian immigrants in America come from the upper echelons of India’s social hierarchy.” Most of them are from higher castes, which means they have access to influential social networks both in India and in the US. These are the people likely to succeed financially no matter whether they stay in India or immigrate. Because of these three selection processes, the typical Indian-American is starkly different from the typical Indian or native-born American.

What should we conclude?

Only that we shouldn’t read too much into the financial success of Indian-Americans. Nor should we belittle the Indians who couldn’t or chose not to immigrate to the United States, or elsewhere, or the other immigrant and native-born US groups who have lower incomes. As psychologists have found, a significant chunk of a person’s success in any domain, including financial success, is dictated by their luck. This includes the fortune of their birth.