Immigrant Earnings, Relative to What? The Importance of Earnings Function Specification and Comparison Points

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Immigrant Earnings, Relative to What? The Importance of Earnings Function Specification and Comparison Points

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Yuengert, A M

Abstract

Immigrant relative earnings estimates are sensitive to the choice of comparison point and the specification of earnings. Non-sample mean comparisons (Borjas, 1985) understate relative earnings. Simple earnings specifications (linear education, quadratic experience) overstate relative earnings for both poorly and well-educated immigrants. Specifications which ignore omitted variables understate the relative earnings of poorly educated immigrants and overstate those of well-educated ones. Although measures of assimilation and changes in immigrant quality are insensitive to earnings specification, they indicate strong earnings growth for post-1964 immigrants, an overall decrease in immigrant quality, and an increase in Mexican immigrant quality. Copyright 1994 by John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 9 (1994)
Issue (Month): 1 (Jan.-March)
Pages: 71-90
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Handle: RePEc:jae:japmet:v:9:y:1994:i:1:p:71-90

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George J. Borjas, 1998. "The Economic Progress of Immigrants," NBER Working Papers 6506, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- George J. Borjas, 2000. "The Economic Progress of Immigrants," NBER Chapters, in: Issues in the Economics of Immigration, pages 15-50 National Bureau of Economic Research, Inc. [Downloadable!]
George J. Borjas & Lawrence F. Katz, 2005. "The Evolution of the Mexican-Born Workforce in the United States," NBER Working Papers 11281, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- George J. Borjas & Lawrence F. Katz, 2007. "The Evolution of the Mexican-Born Workforce in the United States," NBER Chapters, in: Mexican Immigration to the United States, pages 13-56 National Bureau of Economic Research, Inc. [Downloadable!]
Ahmed, Nina, 2005. "Intergenerational Impact of Immigrants' Selection and Assimilation on Health Outcomes of Children," Analytical Studies Branch Research Paper Series 2005247e, Statistics Canada, Analytical Studies Branch. [Downloadable!]

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