Surprising Recent Immigrant Wage Growth: Evidence from Information Technology Occupations

Abstract

Information technology (IT) occupations have seen high rates of employment growth in recent years and employers have relied on foreign born workers to help fill labor shortages (Mithas and Lucas,Management Science, 2010). By 2011, about 21 % of IT workers in five of the largest IT occupations in the U.S. were foreign born (Bureau of the Census, American Community Survey, 2011). Our research explores the relative wage and salary earnings of college educated immigrant IT workers from 2006 to 2011. For several reasons, we initially expected that immigrant earnings in IT occupations would be less than native earnings. First, many immigrants, especially immigrant IT workers, have temporary visas (Kerr and Lincoln, Journal of Labor Economics, 2010). Second, recessions more adversely affect immigrants than natives (Orrenius and Zavodny, American Economic Review, 2010). Third, many immigrants may initially lack English language proficiencies (Chiswick and Miller, Journal of Population Economics, 2002). These factors suggest that immigrant IT workers should have lower earnings and be more adversely affected during cyclical downturns than native ITworkers. Surprisingly, our study shows that immigrants in IT occupations actually earned higher wages than natives in 2006, and that this advantage was maintained during the recession. Data are drawn from the American Community Survey (ACS) and includes 3 years to represent three phases of the current business cycle: 2006 is a boom year, 2009 is a recession year, and 2011 is a recovery year. The sample consists of 56,784 native and foreign born college graduates who are between 25 and 65 years of age and working full time in five IT occupations: computer systems analysts and computer scientists; operations and systems researchers and analysts; computer and peripheral equipment operators; programmers of machine tools; and computer and peripheral equipment operators. Excluded from the sample were those with imputed incomes, those not working at least 35 hours and those employed less than 50 weeks during the past year. Atl Econ J (2014) 42:115–116 DOI 10.1007/s11293-014-9411-9