Human Capital and the Economic Assimilation of Recent Immigrants in Hong Kong

Abstract

Using data from the 1996, 2001, and 2006 years of the Hong Kong Population Census, this paper reported the nativity earnings gap among a synthetic cohort of immigrant and native male Chinese employees in Hong Kong. Consistent with previous research, we found earnings divergence for all workers. However, this earnings divergence masked a reverse trend for low-skilled workers. Over time, low-skilled immigrant workers gained earnings assimilation with low-skilled native workers, but high-skilled immigrant workers did not gain assimilation with high-skilled native workers. A decomposition analysis suggested that the relative skill prices cannot explain the overtime change in the relative mean-earnings gaps by nativity. Further separating pre- and postmigration education of immigrants did not improve the explanatory power of the relative skill prices. Our results for Hong Kong are consistent with the findings from recent research on the economic assimilation of low-skilled immigrants in other countries.