IDEAS home Printed from https://ideas.repec.org/a/sae/amerec/v64y2019i1p31-44.html
   My bibliography  Save this article

The Earnings Disadvantage of 21st Century Immigrants in the United States

Author

Listed:
  • Fahad Gill
  • Waseem Ahmad

Abstract

This article provides a comprehensive analysis of the earnings disadvantage of 21st century immigrants in the United States. The study is the first to decompose the earnings disadvantage faced by recent immigrants to present the channels through which immigrants lag behind their native counterparts. The decomposition of the earnings disadvantage reveals that the time spent in the United States is the key determinant of the earnings disadvantage. Other important sources of the earnings disadvantage of immigrants are the levels of English-language proficiency and educational attainment. The decomposition analysis also suggests that low levels of human capital cause an even larger disadvantage for immigrants in the years following the 2008-2009 recession as compared with the corresponding relative returns of the prerecession period. The decomposition analysis and trends in returns to human capital variables highlight the merits of a selective immigration system that favors young, English-speaking, and highly educated individuals. JEL Classifications : J1, J3, J6

Suggested Citation

  • Fahad Gill & Waseem Ahmad, 2019. "The Earnings Disadvantage of 21st Century Immigrants in the United States," The American Economist, Sage Publications, vol. 64(1), pages 31-44, March.
    • Handle: RePEc:sae:amerec:v:64:y:2019:i:1:p:31-44
    DOI: 10.1177/0569434518793367
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0569434518793367
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0569434518793367?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Timothy Miller & Ronald Lee, 2000. "Immigration, Social Security, and Broader Fiscal Impacts," American Economic Review, American Economic Association, vol. 90(2), pages 350-354, May.
    2. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    3. George J. Borjas & Rachel M. Friedberg, 2009. "Recent Trends in the Earnings of New Immigrants to the United States," Working Papers 2009-13, Brown University, Department of Economics.
    4. George J. Borjas, 2021. "The Slowdown in the Economic Assimilation of Immigrants: Aging and Cohort Effects Revisited Again," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 3, pages 31-65, World Scientific Publishing Co. Pte. Ltd..
    5. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    6. George J. Borjas, 2021. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 2, pages 3-29, World Scientific Publishing Co. Pte. Ltd..
    7. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
    8. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    9. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    10. Edward Funkhouser & Stephen J. Trejo, 1995. "The Labor Market Skills of Recent Male Immigrants: Evidence from the Current Population Survey," ILR Review, Cornell University, ILR School, vol. 48(4), pages 792-811, July.
    11. Borjas, George J, 1995. "Assimilation and Changes in Cohort Quality Revisited: What Happened to Immigrant Earnings in the 1980s?," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 201-245, April.
    12. McManus, Walter & Gould, William & Welch, Finis, 1983. "Earnings of Hispanic Men: The Role of English Language Proficiency," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 101-130, April.
    13. Duleep, Harriet & Regets, Mark, 2002. "The Elusive Concept of Immigrant Quality: Evidence from 1970-1990," IZA Discussion Papers 631, Institute of Labor Economics (IZA).
    14. Chiswick, Barry R. & Miller, Paul W., 2009. "The international transferability of immigrants' human capital," Economics of Education Review, Elsevier, vol. 28(2), pages 162-169, April.
    15. Gnanaraj Chellaraj & Keith E. Maskus & Aaditya Mattoo, 2008. "The Contribution of International Graduate Students to US Innovation," Review of International Economics, Wiley Blackwell, vol. 16(3), pages 444-462, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carl Lin, 2016. "How Do Immigrants From Taiwan Fare In The U.S. Labor Market?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(05), pages 1-38, December.
    2. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    3. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    4. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    5. Roberto Pedace & Christine DuBois, 2012. "Immigration policy and employment assimilation in the United States," Applied Economics, Taylor & Francis Journals, vol. 44(36), pages 4721-4730, December.
    6. Green, David A. & Worswick, Christopher, 2012. "Immigrant earnings profiles in the presence of human capital investment: Measuring cohort and macro effects," Labour Economics, Elsevier, vol. 19(2), pages 241-259.
    7. George J. Borjas, 2021. "The Slowdown in the Economic Assimilation of Immigrants: Aging and Cohort Effects Revisited Again," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 3, pages 31-65, World Scientific Publishing Co. Pte. Ltd..
    8. Abdulla, Kanat, 2020. "Human capital accumulation: Evidence from immigrants in low-income countries," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 951-973.
    9. Roupakias, Stelios, 2023. "Immigrant Assimilation in the Greek Labor Market," MPRA Paper 118351, University Library of Munich, Germany.
    10. Hanna Wielandt, 2015. "Employment Polarization and Immigrant Employment Opportunities," SFB 649 Discussion Papers SFB649DP2015-025, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    11. Harriet Duleep & Xingfei Liu & Mark Regets, 2022. "How the earnings growth of US immigrants was underestimated," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 381-407, April.
    12. Valentine Fays & Benoît Mahy & François Rycx, 2023. "Wage differences according to workers' origin: The role of working more upstream in GVCs," LABOUR, CEIS, vol. 37(2), pages 319-342, June.
    13. Eleni Kalfa & Matloob Piracha, 2017. "Immigrants’ educational mismatch and the penalty of over-education," Education Economics, Taylor & Francis Journals, vol. 25(5), pages 462-481, September.
    14. Euwals, Rob & Dagevos, Jaco & Gijsberts, Mérove & Roodenburg, Hans, 2007. "Immigration, Integration and the Labour Market: Turkish Immigrants in Germany and the Netherlands," IZA Discussion Papers 2677, Institute of Labor Economics (IZA).
    15. Annabelle Krause & Ulf Rinne & Simone Schüller, 2015. "Kick It Like Özil? Decomposing the Native-Migrant Education Gap," International Migration Review, Wiley Blackwell, vol. 49(3), pages 757-789, September.
    16. Amelie F. Constant & Annabelle Krause & Ulf Rinne & Klaus F. Zimmermann, 2017. "Reservation wages of first- and second-generation migrants," Applied Economics Letters, Taylor & Francis Journals, vol. 24(13), pages 945-949, July.
    17. Bossler, Mario, 2014. "Sorting within and across establishments : the immigrant-native wage differential in Germany," IAB-Discussion Paper 201410, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    18. Joseph Deutsch & Jacques Silber, 2007. "Earnings Functions and the Measurement of the Determinants of Wage Dispersion: Extending Oaxaca’s Approach," Economics Working Paper Archive wp_521, Levy Economics Institute.
    19. Lee, Taehoon & Peri, Giovanni & Viarengo, Martina, 2022. "The gender aspect of migrants’ assimilation in Europe," Labour Economics, Elsevier, vol. 78(C).
    20. Prummer, Anja & Siedlarek, Jan-Peter, 2014. "Institutions And The Preservation Of Cultural Traits," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 470, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

    More about this item

    Keywords

    relative earnings; the Great Recession; earnings decomposition; American Community Survey; 21st century immigrants;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:amerec:v:64:y:2019:i:1:p:31-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://journals.sagepub.com/home/aex .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.