Earnings Of Immigrants Research Articles

Migrants from a Different Shore: Earnings and Economic Assimilation of Immigrants from China in the United States

AbstractUsing data from 1980, 1990, and 2000 U.S. censuses, as well as the 2010 and 2019 American Community Surveys and the 1993–2019 National Survey of College Graduates, we investigate the performance of Chinese immigrants in the U.S. labor market over the past 40 years since China initiated its economic reforms and open-door policy in 1978. The results indicate that by 1990, Chinese immigrants’ earnings surpassed those of immigrants from other countries, and by 2010, they exceeded the earnings of U.S.-born workers. Our Oaxaca-Blinder and Quantile decomposition analyses suggest that a significant portion of the earnings advantage held by Chinese immigrants, compared to other immigrant groups and U.S.-born workers over time, can be attributed to differences in observable characteristics, with education being the most crucial factor, both at the mean and across the earnings distribution. By employing national surveys that provide data on college graduates, we demonstrate that attaining the highest degree earned in the U.S. is associated with higher earnings for Chinese immigrants compared to all other immigrants. Furthermore, the difference in returns to U.S.-earned highest degrees can account for this earnings advantage. (JEL J31, J61, J24)

Estimating the Wage Premia of Refugee Immigrants: Lessons from Sweden

This article examines the wage earnings of refugee immigrants in Sweden. Using administrative employer–employee data from 1990 onward, approximately 100,000 refugee immigrants who arrived between 1980 and 1996 and were granted asylum are compared to a matched sample of native-born workers. Employing recentered influence function (RIF) quantile regressions to wage earnings for the period 2011–2015, the occupational-task-based Oaxaca–Blinder decomposition approach shows that refugees perform better than natives at the median wage, controlling for individual and firm characteristics. This overperformance is attributable to female refugee immigrants. Given their characteristics, refugee immigrant females perform better than native females across all occupational tasks studied, including non-routine cognitive tasks. A notable similarity of the wage premium exists among various refugee groups, suggesting that cultural differences and the length of time spent in the host country do not have a major impact.

The Effect of Foreign and Domestic Graduate Degrees on the Earnings of Immigrants to the U.S.

Using a novel panel dataset of recent immigrants to the United States, we identify return migration rates and earnings trajectories for two immigrant groups: those with foreign graduate degrees and those who immigrate and acquire a U.S. graduate degree. We focus on immigrants (of both genders) to the United States who arrive in the same entry cohort and from the same country of birth over the period 2005–2015. In linked demographic and administrative data, we find that downward earnings trajectories are predictive of return migration for immigrants with degrees acquired abroad. Meanwhile, immigrants with U.S. graduate degrees experience mainly upward earnings mobility while in the United States, but we find that the return migrants in this population have earnings that, on average, are lower than their permanent counterparts.

Restoring culture and capital to cultural capital: origin–destination cultural distance and immigrant earnings in the United States

ABSTRACT An extensive sociological literature maintains that cultural capital is pivotal in perpetuating social inequalities. However, empirical tests of cultural capital theory focus on how culture influences educational outcomes, not earnings, and they mainly look for cultural differences across social classes within societies. We propose a direct test of economic returns to cultural capital based instead on differences in national cultures across countries. Using the American Community Survey and the National Survey of College Graduates, we analyze the relationship between immigrants’ lack of U.S.-specific cultural capital, proxied by cultural distance between the origin country and the U.S., and their earnings. Findings consistently indicate that origin – U.S. cultural distance is linked to immigrants’ lower earnings after controlling for numerous other factors, supporting cultural capital theory. Cultural distance earnings penalties are more pronounced for immigrants with at least a bachelor’s degree, those arriving in adulthood, and those with foreign degrees. Moreover, county-level analysis reveals more sizable cultural distance penalties in more competitive and unequal labour markets, highlighting how subnational receiving contexts shape origin-country disparities in immigrants’ economic incorporation at their destinations.

Real Exchange Rates and the Earnings of Immigrants

Abstract We relate origin-destination real price differences to immigrants’ reservation wages and their career trajectories, exploiting administrative data from Germany and the 2004 enlargement of the European Union. We find that immigrants who enter Germany when a unit of earnings from Germany allows for larger consumption at home settle for lower entry wages, but subsequently catch up to those arriving with less favourable exchange rates, through transition to better-paying occupations and firms. Similar patterns hold in the United States data. Our analysis offers one explanation for the widespread phenomenon of immigrants’ downgrading, with new implications for immigrant cohort effects and assimilation profiles.

Cultural and economic integration of immigrants in Canada: “Do you play Hockey?”

This paper studies whether acculturation by immigrants and other minority groups is associated with economic integration in Canada. We examine immigrants’ participation in winter sports, particularly hockey, as a proxy for acculturation given that these sports are popular in Canada but are rarely watched or practiced in the origin countries of many immigrants to Canada. Using the Canadian Community Health Survey, we find that practicing winter sports has a positive effect on the earnings of immigrants and other minority groups. Specifically, practicing winter sports closes the income gap between immigrants and natives. However, the gap does not decrease for visible-minority immigrants, suggesting that acculturation might not be sufficient to combat racial biases.

Real Exchange Rates and the Earnings of Immigrants

Real Exchange Rates and the Earnings of Immigrants

Real Exchange Rates and the Earnings of Immigrants

Real Exchange Rates and the Earnings of Immigrants

New Canadians Working amid a New Normal: Recent Immigrant Wage Penalties in Canada during the COVID-19 Pandemic.

The global coronavirus disease 2019 (COVID-19) pandemic has exposed and arguably intensified many existing inequalities. This analysis explores the relationship between recent immigrant earnings and the pandemic. Specifically, we attempt to empirically answer the question "Has the COVID-19 pandemic exacerbated (or mitigated) recent immigrant-non-immigrant employment and wage gaps?" We find that the pandemic did not change the labour force activity profile of recent or long-term immigrants. Moreover, the pandemic did not disproportionately disadvantage recent immigrants' earnings. In fact, recent immigrant men who were employed during the COVID-19 crisis experienced a small but statistically significant earnings premium. This was insufficient, however, to overcome the overall earnings discount associated with being a recent immigrant. In addition, we find that the recent immigrant COVID-19 earnings boost is observable only at and below the median of the earnings distribution. We also use Heckman selection correction to attempt to adjust for unobserved sample selection into employment during the pandemic. The fact that COVID-19 has not worsened recent immigrant earnings gaps should not overshadow the large, recent immigrant earnings disparities that existed before the pandemic and continue to exist regardless of the COVID-19 crisis.

Policies, Potentials, and Pitfalls: the Impact of Economic Admission Categories on Recent Immigrant Earnings Disparities

Policies, Potentials, and Pitfalls: the Impact of Economic Admission Categories on Recent Immigrant Earnings Disparities

Asymmetric information, credential assessment services and earnings of new immigrants

ABSTRACT Based on the 2016 Canadian Census of Population, some immigrant groups have higher entry-earning returns on their ability than others, and experience a lot more variation in earnings given similar variations in ability compared to other groups. The uneven variance in earnings given similar variances in ability is an indication of statistically discriminated immigrant groups due to information gaps. I show that credential assessment is an essential service to reduce information gaps between employers and immigrant workers. While assessors do not reveal an immigrant worker’s true ability without error, they may supply contextual and/or specific information about the worker and their source country. The more about the source country that goes unexplained, variance in ability and immigration increases, while variance in earnings decreases. However, these results are generated only if the credential assessor faces considerable difficulty in learning about the source country and migrants are of low ability.

How the earnings growth of US immigrants was underestimated

Two radically different descriptions of immigrant earnings trajectories in the USA have emerged. One asserts that immigrant men, following the 1965 Immigration and Nationality Act, have low initial earnings and high earnings growth. Another asserts that the post-1965 immigrants have low initial earnings and low earnings growth. We describe the methodological issues that create this divide and show that low earnings growth becomes high earnings growth when immigrants are followed from their initial years in the USA; earnings growth is allowed to vary with entry earnings; and—when following cohorts instead of individuals—sample restrictions commonly used by labor economists are avoided.

Corrosive effects of corruption on human capital and aggregate productivity

AbstractCorruption has been shown to affect a variety of observed human capital inputs, such as health status, school enrollment, and student dropout rates. However, to the best of our knowledge, the question of how corruption affects unobserved skills has received little attention. This study investigates the effect of corruption on unobserved human capital, measured from the earnings of immigrants, using the U.S. census data for the period 1980–2000. In the human capital model built in the paper, corruption enters the budget constraint of an individual as a cost of the accumulation of unobservable skills. Using data on immigrants and the theoretical model motivating an empirical analysis, the study reveals how corruption impacts the stock of human capital across countries. According to the prediction deriving from the empirical analysis, corruption has a negative effect on the stocks of human capital. The counterfactual findings using the calibrated model suggest that the elimination of corruption increases aggregate output by 18–21% on average.

Evaluating Foreign Skills: Effects of Credential Assessment on Skilled Immigrants’ Labour Market Performance in Canada

Formal educational qualification is increasingly built into immigrant selection systems in many countries, but in a global context, the transferability and portability of such qualifications has been questioned. In 2013, Canada introduced the requirement for a formal assessment of educational credential equivalence for applicants in the skilled worker category. In this study, we use a Canadian national immigration database and difference-in-differences methodology to investigate whether requiring formal Educational Credential Assessment (ECA) as part of the selection process for skilled immigrants has improved labour market outcomes. Our results indicate that the ECA requirement is positively related to early employment rates and earnings for both men and women. However, this effect is limited to those with no previous employment experience in Canada. We also find that, even with the ECA requirement, significant differences in the earnings of immigrants from different source regions remain. Implications and recommendations are discussed.

Immigrants’ Economic Performance and Selective Outmigration: Diverging Predictions from Survey and Administrative Data

We show that survey and administrative data-based estimates of a panel data model of earnings, employment, and outmigration yield very different qualitative and quantitative predictions. Survey-based estimates substantially overpredict outmigration, in particular for lower performing immigrants. Consequently, employment and earnings of immigrants who remain in the country are overpredicted relative to model predictions from administrative data. Importantly, estimates from both data sources find opposite self-selection mechanisms into outmigration. Differences hold despite using the same cohort, survey period, and observable characteristics. Differences in predictions are driven by difficulties of properly separating non-random sample attrition from selective outmigration in survey data.

Public and Private Sector Earnings of Immigrants and the Canadian-Born: Evidence from the Labour Force Survey

Using Statistics Canada’s monthly Labour Force Survey master files from January 2006 to December 2018, this paper evaluates the wage differences between immigrants and comparable Canadian-born workers both within the respective levels of the private and public sectors, as well as the public sector wage premium within the immigrant and Canadian-born populations. Using both Ordinary Least Squares and Oaxaca-Blinder decomposition techniques, we find that the immigrant wage gap tends to be negative and is largest in the private sector. The public-sector premium relative to the private sector is also larger for immigrants that for the Canadian-born when we compare wage differences within the two groups. Combined, these results suggest that public sector wages are important to narrowing the overall immigrant wage gap.

Over-education and immigrant earnings: a penalized quantile panel regression analysis

ABSTRACT Despite evidence that immigrants experience a higher incidence of over-education, relatively few studies have considered the labour market outcomes of over-education for immigrants. Using longitudinal data and penalized quantile panel regression, we inspect the earnings effects of job mismatches for immigrants in Australia. This first application of the method to this question addresses both individual and distributional heterogeneity. Results confirm divergent effects across the earnings distribution. Immigrants from non-English speaking countries experience lower earnings returns and a substantial earnings penalty of up to 25% from educational mismatched employment. However, in contrast to conventional findings of a penalty based on regression at the mean, at the highest earnings quantile, both Australian-born and immigrants from non-English speaking countries with a host country qualification receive earnings premiums of 2.7 and 11%, respectively, from years of over-education. We discuss the policy implications of this new result.

Linguistic Distance, Languages of Work and Wages of Immigrants in Montreal

We use the Levenshtein linguistic distance measure to explore the question of whether the distance between an immigrant’s mother tongue and a Canadian official language (English or French) has an impact on his/her economic integration into the labor market. Using microdata from the master files of the 2001 and 2006 Canadian censuses and from the 2011 National Household Survey, we investigate the relationship between linguistic distance and the intensity of use of English and French at work in the Montreal metropolitan area. That region is characterized by the presence of sizeable French- and English-speaking communities, as well as by a large number of immigrants from a wide variety of linguistic backgrounds. Those elements of linguistic diversity interact in the environment of English being the lingua franca. We find that linguistic distances between immigrants’ mother tongues and English and French have an important impact on the relative intensities of use of the two Canadian official languages at work. We further investigate the role of the languages used at work on the earnings of immigrants by estimating earnings functions. We find that the use of both French and English is remunerated positively in the labor market, but that using English at work has a larger impact on earnings.

Immigrant–non‐immigrant wage differentials in Canada: A comparison between standard and non‐standard jobs

AbstractIt is well established that recent immigrants earn considerably less than their native‐born counterparts even after adjusting for differences in human capital. Another labour market trend has been the growth in non‐standard forms of employment. Since non‐standard forms of work are generally less desirable than standard jobs on a number of dimensions including earnings, this study examines the nexus between immigrant earnings and non‐standard employment to investigate if there is a systemic connection between the two trends. Consistent with earlier research evidence, we find a substantial earnings disadvantage associated with all forms of non‐standard work relative to full‐time, permanent employment. Conditioning on observable characteristics, immigrants are less likely to be employed in full‐time, permanent work. However, when we examine workers in non‐standard jobs, we find that immigrant–non‐immigrant earnings gaps are smaller than those observed among workers in standard jobs. Moreover, the unadjusted mean earnings of long‐term immigrants in part‐time jobs are actually higher than the earnings of similarly employed Canadian‐born workers. Finally, considering immigrants from Western and non‐Western countries, we find that the earnings disadvantage of non‐Western immigrants in non‐standard jobs is smaller than the earnings disadvantage of non‐Western immigrants in standard jobs. These findings suggest that non‐standard jobs provide a point of entry for many new immigrants into the Canadian labour market. But whether these jobs are a bridge to upward mobility or whether they act as traps from which immigrants are unable to escape is a question that needs to be answered with better longitudinal data that track specific cohorts of workers.

Immigrants' Economic Performance and Selective Outmigration: Diverging Predictions from Survey and Administrative Data

We show that survey and administrative data-based estimates of a panel data model of earnings, employment, and outmigration yield very different qualitative and quantitative predictions. Survey-based estimates substantially overpredict outmigration, in particular for lower performing immigrants. Consequently, employment and earnings of immigrants who remain in the country are overpredicted relative to model predictions from administrative data. Importantly, estimates from both data sources find opposite self-selection mechanisms into outmigration. Differences hold despite using the same cohort, survey period, and observable characteristics. Differences in predictions are driven by difficulties of properly separating non-random sample attrition from selective outmigration in survey data.