Permanence and the Propensity to Invest

Abstract

Only immigrants who could reap future benefits would embark on investment in U.S.-specific skills. This suggests that the decision to invest in U.S.-specific human capital and the decision to stay in the U.S. are jointly determined. Using the 1980 and 1990 census data, we estimate the fraction of men migrating between 1975 and 1980 who remained in the U.S. until 1990 by migrant group. We show that immigrant groups that are more likely to remain in the U.S. have higher earnings growth than groups with higher emigration. Japanese men serve as a case study. We show that, overall, they have high earnings upon entering the U.S., low U.S. specific skills, and low earnings growth. Japanese men who appear to be permanently in the U.S. have low earnings upon arrival and high rates of earnings growth.