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Recent Trends in the Earnings of New Immigrants to the United States

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Abstract

This paper studies long-term trends in the labor market performance of immigrants in the United States, using the 1960-2000 PUMS and 1994-2009 CPS. While there was a continuous decline in the earnings of new immigrants 1960-1990, the trend reversed in the 1990s, with newcomers doing as well in 2000, relative to natives, as they had 20 years earlier. This improvement in immigrant performance is not explained by changes in origin-country composition, educational attainment or state of residence. Changes in labor market conditions, including changes in the wage structure which could differentially impact recent arrivals, can account for only a small portion of it. The upturn appears to have been caused in part by a shift in immigration policy toward high-skill workers matched with jobs, an increase in the earnings of immigrants from Mexico, and a decline in the earnings of native high school dropouts. However, most of the increase remains a puzzle. Results from the CPS suggest that, while average entry wages fell again after 2000, correcting for simple changes in the composition of new immigrants, the unexplained rise in entry wages has persisted.

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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2009-13.

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Date of creation: 2009
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Handle: RePEc:bro:econwp:2009-13

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Postal: Department of Economics, Brown University, Providence, RI 02912

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  1. Harriet Orcutt Duleep & Mark C. Regets, 2013. "The Elusive Concept of Immigrant Quality: Evidence from 1970-1990," Working Papers, Department of Economics, College of William and Mary 138, Department of Economics, College of William and Mary.
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  3. Guillermina Jasso & Mark R. Rosenzweig & James P. Smith, 2000. "The Changing Skill of New Immigrants to the United States: Recent Trends and Their Determinants," NBER Chapters, National Bureau of Economic Research, Inc, in: Issues in the Economics of Immigration, pages 185-226 National Bureau of Economic Research, Inc.
  4. James P. Smith, 2006. "Immigrants and the Labor Market," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(2), pages 203-234, April.
  5. Daniel Chiquiar & Gordon H. Hanson, 2005. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 113(2), pages 239-281, April.
  6. David Card & Ethan G. Lewis, 2007. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," NBER Chapters, National Bureau of Economic Research, Inc, in: Mexican Immigration to the United States, pages 193-228 National Bureau of Economic Research, Inc.
  7. Bernt Bratsberg & Erling Barth & Oddbjørn Raaum, 2006. "Local Unemployment and the Relative Wages of Immigrants: Evidence from the Current Population Surveys," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 243-263, May.
  8. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
  9. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(2), pages 221-51, April.
  10. Barry T. Hirsch & Edward J. Schumacher, 2004. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 22(3), pages 689-722, July.
  11. Chinhui Juhn & Jim Airola, 2005. "Wage Inequality in Post-Reform Mexico," Working Papers, Department of Economics, University of Houston 2005-01, Department of Economics, University of Houston.
  12. Joshua Angrist & Victor Chernozhukov & Iván Fernández-Val, 2006. "Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure," Econometrica, Econometric Society, Econometric Society, vol. 74(2), pages 539-563, 03.
  13. Edward Funkhouser & Stephen J. Trejo, 1995. "The labor market skills of recent male immigrants: Evidence from the Current Population Survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(4), pages 792-811, July.
  14. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U. S. Wage Inequality: Re-Assessing the Revisionists," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2095, Harvard - Institute of Economic Research.
  15. George J. Borjas, 1994. "Assimilation and Changes in Cohort Quality Revisited: What Happened to Immigrant Earnings in the 1980s?," NBER Working Papers 4866, National Bureau of Economic Research, Inc.
  16. Kristin F. Butcher & John DiNardo, 1998. "The Immigrant and Native-born Wage Distributions: Evidence from United States Censuses," NBER Working Papers 6630, National Bureau of Economic Research, Inc.
  17. Gordon H. Hanson, 2007. "Emigration, Labor Supply, and Earnings in Mexico," NBER Chapters, National Bureau of Economic Research, Inc, in: Mexican Immigration to the United States, pages 289-328 National Bureau of Economic Research, Inc.
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  19. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(2), pages 549-599, May.
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Cited by:
  1. Li, Qing & Sweetman, Arthur, 2014. "The quality of immigrant source country educational outcomes: Do they matter in the receiving country?," Labour Economics, Elsevier, Elsevier, vol. 26(C), pages 81-93.
  2. Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Chassamboulli, Andri & Palivos, Theodore, 2012. "A Search-Equilibrium Approach to the Effects of Immigration on Labor Market Outcomes," MPRA Paper 43297, University Library of Munich, Germany.
  4. Michele Battisti & Gabriel Felbermayr & Giovanni Peri & Panu Poutvaara, 2014. "Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare," NBER Working Papers 20131, National Bureau of Economic Research, Inc.
  5. Andri Chassamboulli & Giovanni Peri, 2014. "The Labor Market Effects of Reducing Undocumented Immigrants," NBER Working Papers 19932, National Bureau of Economic Research, Inc.
  6. George J. Borjas, 2013. "The Slowdown in the Economic Assimilation of Immigrants: Aging and Cohort Effects Revisited Again," NBER Working Papers 19116, National Bureau of Economic Research, Inc.
  7. David A. Green & Christopher Worswick, 2004. "Immigrant earnings profiles in the presence of human capital investment: measuring cohort and macro effects," IFS Working Papers, Institute for Fiscal Studies W04/13, Institute for Fiscal Studies.
  8. Aguilar Esteva, Arturo Alberto, 2013. "Stayers and Returners: Educational Self-Selection among U.S. Immigrants and Returning Migrants," IZA Discussion Papers 7222, Institute for the Study of Labor (IZA).
  9. Osili, Una Okonkwo & Paulson, Anna, 2014. "Crises and confidence: Systemic banking crises and depositor behavior," Journal of Financial Economics, Elsevier, Elsevier, vol. 111(3), pages 646-660.

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