Earnings Of Immigrants Research Articles

The impact of host language proficiency across the immigrants\u2019 earning distribution in Spain

This paper explores the impact of Spanish language proficiency on immigrant earnings in Spain using an instrumental variable quantile regression approach. The impact is on average roughly 17.2% but varies substantially across the earning distribution. The return to destination language proficiency actually ranges from zero at the bottom quantiles to 30% at the top quantile of the earning distribution. These findings suggest that the benefits derived from host language knowledge are particularly important among individuals with stronger unobserved abilities and marketable skills and that language training policies targeted at specific immigrant population categories may be ineffective from a labor market earning perspective.JEL Classification: F22, J24, J61

The Transferability of Skills and Degrees: Why the Place of Education Affects Immigrant Earnings

An important explanation for immigrants’ wage disadvantage is that human capital acquired in the country of origin is not fully transferable to the country of destination. Credentialing theories, on the other hand, argue that being educated abroad results in lower wages because foreign degrees are weaker signals to employers and might impede formal access to occupations. In this study, we use the Programme for the International Assessment of Adult Competencies 2012 (PIAAC) data and include—besides educational degrees—measures of cognitive, non-cognitive, and job-specific skills to explain wages. In our analysis of 11 European countries, we find robust evidence that having a non-Western foreign degree is associated with lower wages. After accounting for different types of skills, the wage penalty associated with having a foreign degree remains substantial, as skills explain only a third of the place of education effect. This finding is in line with the argument that being educated abroad results in lower wages because of not only the limited transferability of skills, but also the limited transferability of degrees.

Earning Gaps for Chinese Immigrants in Canada and the United States

AbstractThis study compares the US and Canada on the gap in earnings between Chinese immigrants and native‐born whites. Canada and the US are arguably more alike than most possible country pairings, yet they differ in significant ways in their approaches to immigration and integration. The primary difference between Canada and the US regarding immigration policy is that Canada selects a larger proportion of economic immigrants – that is, those admitted based on their ability to contribute to the economy – than the US's focus on family reunification. Canadian immigration and multicultural integration policy does not appear to improve Chinese immigrant earnings in the way that might be predicted from Canada's skilled‐based immigrant selection policy and welcoming social context. In spite of a more laissez‐faire approach to immigrant integration and a less skill‐selective immigration policy, we show that Chinese immigrants are earning relatively more in the US than in Canada.

Immigrant Occupational Composition and the Earnings of Immigrants and Natives in Germany: Sorting or Devaluation?

In this article, the influence of immigrant occupational composition on the earnings of immigrants and natives in Germany is examined. Using data from the German Socio-Economic Panel Study and the German Microcensus, several relevant concepts are tested. The notion of quality sorting states that the differences in wages that are associated with the immigrant share within occupations are due only to differences in qualification requirements. Cultural devaluation assumes a negative influence over and above that of quality sorting. The findings indicate that both processes are at work. Additional analyses reveal that the impact of immigrant occupational composition is largely restricted to white-collar occupations, which underlines the importance of considering historical differences between occupation types in classic migration destinations such as Germany.

The Earnings of Undocumented Immigrants

Over 11 million undocumented persons reside in the United States, and there has been a heated debate over the impact of legislative or executive efforts to regularize the status of this population. This paper examines the determinants of earnings for undocumented workers. Using newly developed methods that impute undocumented status for foreign-born persons sampled in microdata surveys, the study documents a number of findings. First, the age-earnings profile of undocumented workers lies far below that of legal immigrants and of native workers, and is almost perfectly flat during the prime working years. Second, the unadjusted gap in the log hourly wage between undocumented workers and natives is very large (around 40 percent), but half of this gap disappears once the calculation adjusts for differences in observable socioeconomic characteristics, particularly educational attainment. Finally, the adjusted wage of undocumented workers rose rapidly in the past decade. As a result, there was a large decline in the wage penalty associated with undocumented status. The relatively small magnitude of the current wage penalty suggests that a regularization program may only have a modest impact on the wage of undocumented workers.

Prior host-country work experience and immigrant labor market outcomes: evidence from Canada

Recent changes to immigration selection policies favor skilled workers with prior work experience in the immigrant host country. Using unique administrative tax data for Canada, we estimate earnings equations to quantify the difference in earnings of immigrants with prior Canadian experience (prefilers) and those without prior experience (non-prefilers). We find that, relative to non-prefilers, entry earnings are higher for prefilers and, for male immigrants, this earnings advantage persists for at least 20 years after arrival. We show that the primary source of the higher entry earnings of prefilers is a higher return to foreign experience. In addition, the prefiler earnings advantage is largest for university graduates and the return to foreign experience is higher for prefilers from Western countries than those from the rest of the world. Our findings suggest that a move towards an immigrant selection system which uses previous host-country work experience as a criterion will improve the labor market performance of immigrants.

Earnings of Immigrants in Traditional and Non-Traditional Destinations: A Case Study from Atlantic Canada

Despite growing interest in the regionalization of immigration, comparative studies of the labor market outcomes of immigrants in traditional and non-traditional destinations remain limited in Canada. Using Atlantic Canada as a non-traditional destination and drawing data from the 2006 Census of Population, this study compares the determinants of immigrant earnings in this region with those of three major traditional destinations, Montreal, Toronto, and Vancouver (MTV). Results indicate the returns to postgraduate degrees and foreign credentials on earnings are higher in Atlantic Canada than MTV, although the costs of being visible minorities and speaking non-official language(s) at home are not statistically different between the two destinations. Results also show the earning disparities linked to employment in ethnic businesses are smaller in Atlantic Canada. This paper discusses implications of these findings for immigrant settlement policy.

HOW DO IMMIGRANTS FROM TAIWAN FARE IN THE U.S. LABOR MARKET?

This paper presents evidence that since 1980, relative to native-born Americans and other immigrants, the earnings of Taiwanese immigrants have grown rapidly as they assimilate into the U.S. economy. Consistent with the existing U.S. evidence, I show that most of the immigrant–native earnings gaps can be explained by endowments, and the importance of endowments continues to increase. The estimates indicate that the improved endowments from education and U.S. experience, along with rising returns to both factors, largely explain Taiwanese immigrants’ economic assimilation experience. I show that more recently arrival cohorts of Taiwanese immigrants have earned more than the older ones since 1980.

The “Negative” Assimilation of Immigrants: a Counter-Example from the Canadian Labor Market

With Canadian data ranging from 1991 to 2011, this paper investigates the effects of the number of years since migration on the earnings of immigrants from the United States and the United Kingdom in Canada. The aim is to test whether the “negative assimilation” hypothesis proposed by Chiswick and Miller (Ind Labor Relat Rev 64(3):502–525, 2011) for immigrants to the United States is a universal finding for immigrants from countries with similar economic standing and skill transferability to those of the destination country. We also expand on Chiswick and Miller’s work by doing regressions for both males and females and by comparing to Chinese immigrants, a representative group from a less developed country. We find that the negative assimilation hypothesis does not hold for the Canadian labor market. Specifically, the assimilation rate is close to zero for U.K. immigrants and strictly positive for U.S. immigrants (although lower than that of a comparison group of Chinese immigrants). The assimilation rates are also higher for females than for males.

Estimating immigrant earnings profiles when migrations are temporary

The assumption that all migrations are permanent, which pervaded the early microdata-based research on immigrant career profiles, is not supported by the empirical evidence. Rather, many – if not most – migrations appear to be temporary. In this paper, therefore, we illustrate the estimation challenges when migrations are temporary. As in an overwhelming share of the selective out-migration literature, our basic structure assumes that the process that determines out-migration is unrelated to other choices that affect wage growth, such as human capital investment or labour supply decisions, which greatly simplifies the analysis. When the choice of whether and when to out-migrate also affects decisions that determine wage growth, the problem becomes inherently dynamic and requires a more structural approach to estimation, which we briefly discuss.

Promoting entry of high-quality workers through US immigration policy

ABSTRACTWe examine how US immigrants would be affected by applying a simple point system for admission, as Canada does. Since US immigration policy emphasizes family reunification, immigrants have lower education and earnings than natives, with unauthorized immigrants’ education below legal ones. Using American Community Survey data, and Center for Migration Studies data, which allows us to distinguish legal from unauthorized immigrants, we examine the effects of requiring immigrants to meet 2 of 3 conditions: (1) a high school or college degree, (2) being less than 40 years old and (3) working in a professional occupation, while admitting the same numbers of immigrants. This policy changes the source countries of immigrants and there are large positive effects on immigrant earnings. Immigrants’ use of government transfer programs is reduced to below natives and income inequality falls. Finally, with existing policy, immigrant earnings growth is not enough to overtake natives given immigrants’ entering earnings disadvantage. With this point system, immigrants start at a higher level and surpass natives relatively quickly.

Local labor markets and earnings of refugee immigrants

This paper estimates how local conditions at the time of immigration influence later outcomes for refugee immigrants to Norway, exploiting the quasi-experimental nature of the Norwegian system for settlement for “quota” or resettlement refugees. A unique administrative dataset with assigned settlement municipalities is used to identify the causal effect of initial location characteristics. Being placed in a labor market where other non-OECD immigrants do well increases own annual labor earnings up to 6 years after immigration. Extended models suggest that this effect is not driven by individual scarring effects: when controlling for the contemporaneous employment rate in the assigned region, effects of initial conditions disappear. Rather, the effects appear to be due to persistence in local labor market conditions combined with limited geographical mobility in response to adverse labor market conditions.

Cultural Integration and Occupational Achievement among Mexican Immigrants along the US-Mexico Border

IntroductionThe paper is a brief investigation into the level and type of among the Mexican-born workers into the U.S. labor market. Mexicans make up the largest immigrant group in the U.S. and they are integral part of the workforce. As of 2014, as BLS reported1, there were 8.8 million (documented) immigrant workers of Hispanic or Latino ethnicity. It is safe to assume that a significant majority of them are Mexican-born. These immigrant workers are making 21 percent less than their native-born Hispanic/Latino counterparts. For the undocumented immigrants, the gap is even larger. For instance, Riverra-Batiz (1999) found that legalization had a significant positive on the earnings of undocumented immigrants. This may be caused by elimination of the monopsonistic power that some employers have over them by allowing immigrants greater access to the labor market.The status and unique characteristics of immigrants, documented or not, have been the subject of many studies. We are particularly interested in their cultural integration/assimilation and the associated economic outcomes.1. Cultural Integration and language acquisitionDifferent immigrant groups display different assimilation characteristics. Mexicanimmigrants generally rank far lower in the Assimilation Index, compared to other countries2. For instance, in 2007, immigrants' assimilation level was measured to be only one-third of the Cuban-born immigrants. They also tend to naturalize very slowly. Of those who arrived between 1975 and 1980, only around 45 per cent had become citizens by 2007. The same rate is around 90 per cent for Vietnamese and around 65 per cent for Italians (Vidgor, 2009).Language skills, along with years spent in the U.S., are generally thought to be a good proxy to measure the level of cultural integration. If English language proficiency is a good proxy for cultural integration, immigrants from Mexico appear to have integrated into American society less rapidly than other groups: only a dismal 49 per cent of immigrants are fluent in English compared to 80 per cent fluency among non-Mexican immigrants. A half of discrepancy, as Lazear (2007) calculates, could be explained by concentration of immigrants in enclaves: those who live in concentrated areas learn English less rapidly and obtain less education. This is what Chiswick (1978) called Mexican ethnic-group effect resulting in initially lower earnings compared to other immigrants. This pattern is only exaggerated by the fact that immigrants on average expect to stay in the U.S. for a shorter time period of time than non-Mexican immigrants.We intend to demonstrate the extent to which cultural measured by English proficiency and age-at-arrival in the U.S. determines the status of immigrants in the job market and, more importantly, whether or not the return on integration varies between El Paso, TX, and Pima, (AZ), two border counties with a heavy immigrant presence. The paper is organized as follows: first, we will study the theoretical and empirical literature that articulates the role of English speaking skills and age at time of migration in determining occupational segregation, and in turn earnings, among Mexican-origin workers. Secondly, we will introduce our data and methodology. Lastly, we will present and interpret the results of our multinomial regression analyses.2. English Skills, migration age and occupational sorting: a literature overviewThere is a modest literature on the effects of language acquisition on labor market outcomes. One of the earlier works in the field was conducted by Rivera-Batiz (1992), using the 1985 Young Adult Literacy Assessment survey, a nationally representative household survey of persons 21 to 25 years old. A reading proficiency test was given to each individual (in place of a self-assessed spoken English rating). …

Linguistic and Economic Adjustment Among Immigrants in Israel

This paper analyzes the Hebrew language proficiency, probability of employment, and labor market earnings of immigrants in Israel. It uses the 2010/11 Immigrant Absorption Survey conducted by the Israeli Central Bureau of Statistics. Unique features of the analysis include the study of long-duration immigrants (3 to 20 years), and analyses for: males and females, primary reasons for immigration, the subsidized intensive Hebrew language training program (ulpan), Ethiopian Jews, and Jewish and non-Jewish immigrants from the Former Soviet Union (FSU), in addition to immigration, demographic, and human capital variables.Results from multivariate analyses largely accord with the standard theoretical model of language proficiency regarding the mechanisms of exposure, efficiency, and economic incentives. Acquaintance with the local language, on its part, increases the likelihood of being employed, and it has positive earnings outcomes. We discuss implications of the findings for public policy which can improve the adjustment of these new immigrants into their new society hence also moderate inter-group tensions.

Estimating Immigrant Earnings Profiles When Migrations are Temporary

The assumption that all migrations are permanent, which pervaded the early microdata-based research on immigrant career profiles, is not supported by the empirical evidence. Rather, many – if not most – migrations appear to be temporary. In this paper, therefore, we illustrate the estimation challenges when migrations are temporary. As in an overwhelming share of the selective out-migration literature, our basic structure assumes that the process that determines out-migration is unrelated to other choices that affect wage growth, such as human capital investment or labour supply decisions, which greatly simplifies the analysis. When the choice of whether and when to out-migrate also affects decisions that determine wage growth, the problem becomes inherently dynamic and requires a more structural approach to estimation, which we briefly discuss.

Comprehensive Wealth of Immigrants and Natives

The 1965 Immigration and Nationality Act had a profound impact on the demographic and skill composition of immigrants arriving in the U.S. A large literature has investigated the relative earnings of immigrants and natives, but much less is known about relative wealth accumulation and the preparation of immigrants for retirement. This paper compares the retirement preparation of older immigrants to that of native-born households using an annualized comprehensive measure of available resources. We find that immigrants have less wealth overall, but that they appear to be drawing down resources at a slower rate. We attempt to make sense of the trends in annualized wealth with the help of a lifecycle framework that incorporates uncertain longevity, bequests, risk in retirement resources, as well as endogenous housing wealth. Simulations from the model indicate that it is difficult to match the observed patterns in annualized wealth without the combination of both an explicit bequest motive and an explicit treatment of housing choice. These patterns mask a good deal of heterogeneity, however, in terms of socioeconomic and demographic characteristics. Some of the largest differences within immigrants occur along the margins of race and ethnicity, as well as the number of years since arrival. The evidence suggests that the typical immigrant is relatively well situated in retirement, but that more recent immigrants have low levels of total resources and are likely to have difficulty maintaining adequate levels of spending in retirement.

Improved legal status as the major source of earnings premiums associated with intermarriage: evidence from the 1986 IRCA amnesty

Exploiting a natural experiment, this paper uses the 1990 US Census data and the 1986 Immigration Reform and Control Act amnesty to investigate the major mechanism through which intermarriage influences immigrant earnings. My strategy involves comparing international marriage premiums received by two groups of Mexican immigrants who arrived before and after the cutoff date of eligibility. Both groups face similar language and culture related obstacles and have to adapt themselves to the new environment, except that unauthorized Mexican workers who arrived before 1982 could obtain legal status through the amnesty while those who arrived after the cutoff date obtained legal status through marriage to a US citizen. Instrumental variables estimates show a significantly larger intermarriage premium for Mexican immigrants who migrated after the cutoff date and no statistically significant intermarriage premium is found in the pre-1982 group. The 35 % premium gap indicates a large effect of intermarriage on immigrant labor market outcomes, operating primarily through an improvement of legal status.

Do Immigrants Gain or Lose by Occupational Licensing?

This paper studies the effects of occupational licensing in Canada on the earnings of immigrants and non-immigrants. The econometric model is estimated for immigrants and non-immigrants as well as between joiners and leavers from occupationally licensed jobs using a large panel data set. The results suggest that occupational licensing raises wages more for immigrant workers than for non-immigrants with similar observed characteristics. However, the probability of being in an occupationally licensed job is lower for immigrants as compared to non-immigrants. The implications of these findings for whether immigrants gain or lose from occupational licensing are discussed.

Labor Market Experience in a “Pseudo-Home” Country: Turkish Immigrants in Northern Cyprus

In this study we analyze the labor market experiences of Turkish immigrants in Northern Cyprus. Northern Cyprus presents a unique example for Turkish migrants, as many traditional obstacles (language barrier, cultural and ethnic differences and non-transferability of human capital) for immigrant laborers are not applicable since Turkish immigrants have ethnic and cultural similarities to native citizens and Turkey is considered the “motherland” of Northern Cyprus. Nonetheless, significant differences between Turkish immigrants and natives in regard to the labor market exist in Northern Cyprus. Using data from the period 2004–2011, we find that although occupational attainment of immigrants has improved in favor of high-skilled occupations, the average wage gap has not decreased significantly. The statistical estimations reveal that Turkish immigrants earn, on average, 25 percent less than natives in the private sector. Furthermore, half of this gap cannot be explained by differences in individual characteristics and ethnic discrimination.

Technological change, occupational tasks and declining immigrant outcomes: Implications for earnings and income inequality in Canada

AbstractThe earnings and occupational task requirements of immigrants to Canada are analyzed. The growing education levels of immigrants in the 1990s have not led to a large improvement in earnings as one might expect if growing computerization and the resulting technological change was leading to a rising return to non‐routine cognitive skills and a greater wage return to university education. Controlling for education, we find a pronounced cross‐arrival cohort decline in earnings that coincided with cross‐cohort declines in cognitive occupational task requirements and cross‐cohort increases in manual occupational task requirements. The immigrant earnings outcomes had only a small effect on overall Canadian earnings inequality.