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The Elusive Concept of Immigrant Quality: Evidence from 1970-1990

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  • Harriet Orcutt Duleep

    ()
    (Thomas Jefferson Program in Public Policy, The College of William and Mary)

  • Mark C. Regets

    ()
    (National Science Foundation)

Abstract

The labor market "quality" of immigrants is a subject of debate among immigration researchers, and a major public policy concern. However, traditional methods of measuring human capital are particularly difficult to apply to recently arrived immigrants. Many factors that have a negative effect on entry earnings also increase either the incentive or the opportunity for faster human capital investment and earning growth. In addition, many country-of-origin acquired skills that are not immediately valued in the U.S. labor market are useful to the acquisition of U.S. skills. Thus entry earnings are not a good measure of the stock of immigrant human capital. This article presents a model of immigrant human capital investment and, using 1970-1990 census data, presents strong evidence of a systematic and important inverse relationship between initial immigrant earnings and subsequent earnings growth. This result-which persists even after accounting for differences in the immigration flows from different countries, sampling error, and the effects of emigration - is fundamentally different from both earlier cross-sectional estimates and more recent pooled models that constrain cohort growth rates to be equal. Although our model provides theoretical support for an inverse relationship only when source country human capital is held constant, faster earnings growth for low-entry-earnings immigrants is found empirically even when age and education are not controlled for. The immigrant human capital investment model presented here explores general principles that may apply to other labor market transitions that involve skill transferability-including occupational change and labor market reentry.

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Bibliographic Info

Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 138.

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Length: 36 pages
Date of creation: 17 Mar 2013
Date of revision:
Handle: RePEc:cwm:wpaper:138

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Keywords: immigration; migration; human capital investment; skill transferability; assimilation;

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References

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  1. Green, David A, 1999. "Immigrant Occupational Attainment: Assimilation and Mobility over Time," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 49-79, January.
  2. Bloom, D.E. & Gunderson, M., 1989. "An Analysis Of The Earnings Of Canadian Immigrants," Discussion Papers 1989_18, Columbia University, Department of Economics.
  3. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
  4. Robert F. Schoeni, 1997. "New Evidence on the Economic Progress of Foreign-Born Men in the 1970s and 1980s," Journal of Human Resources, University of Wisconsin Press, vol. 32(4), pages 683-740.
  5. Kristin F. Butcher & Anne Morrison Piehl, 1998. "Recent immigrants: Unexpected implications for crime and incarceration," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(4), pages 654-679, July.
  6. David E. Bloom & Morley Gunderson, 1991. "An Analysis of the Earnings of Canadian Immigrants," NBER Chapters, in: Immigration, Trade and the Labor Market, pages 321-342 National Bureau of Economic Research, Inc.
  7. Sherrie A. Kossoudji, 1989. "Immigrant Worker Assimilation: Is It a Labor Market Phenomenon?," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 494-527.
  8. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75, pages 352.
  9. Gang, Ira N & Rivera-Batiz, Francisco L, 1994. "Labor Market Effects of Immigration in the United States and Europe: Substitution vs. Complementarity," Journal of Population Economics, Springer, vol. 7(2), pages 157-75.
  10. repec:fth:coluec:437 is not listed on IDEAS
  11. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
  12. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1.
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Citations

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Cited by:
  1. 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.
  2. Lin, Carl, 2013. "How Do Immigrants from Taiwan Fare in the U.S. Labor Market?," IZA Discussion Papers 7748, Institute for the Study of Labor (IZA).
  3. George J. Borjas & Rachel M. Friedberg, 2009. "Recent Trends in the Earnings of New Immigrants to the United States," NBER Working Papers 15406, National Bureau of Economic Research, Inc.
  4. Christian Dustmann & Albrecht Glitz, 2011. "Migration and Education," Norface Discussion Paper Series 2011011, Norface Research Programme on Migration, Department of Economics, University College London.
  5. Sónia Cabral & Cláudia Duarte, 2013. "Mind the gap! The relative wages of immigrants in the Portuguese labour market," Working Papers w201305, Banco de Portugal, Economics and Research Department.
  6. Grenier, Gilles, 2001. "Immigration, langues et performance économique : le Québec et l’Ontario entre 1970 et 1995," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(3), pages 305-338, septembre.
  7. Arbel, Yuval & Tobol, Yossi & Siniver, Erez, 2012. "Social Involvement and Level of Household Income among Immigrants: New Evidence from the Israeli Experience," IZA Discussion Papers 6416, Institute for the Study of Labor (IZA).
  8. Harriet Orcutt Duleep, 2013. "Country of Origin and Immigrant Earnings: Evidence from 1960-1990," Working Papers 131, Department of Economics, College of William and Mary.
  9. Pia M. Orrenius & Madeline Zavodny, 2003. "Does immigration affect wages? A look at occupation-level evidence," Working Papers 0302, Federal Reserve Bank of Dallas.
  10. Gil Epstein, 2009. "Willingness to Assimilate and Ethnicity," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 35, pages 1.
  11. Serena Huang, 2011. "The international transferability of human capital in nursing," International Journal of Health Care Finance and Economics, Springer, vol. 11(3), pages 145-163, September.
  12. Epstein, Gil S. & Gang, Ira N., 2008. "Ethnicity, Assimilation and Harassment in the Labor Market," IZA Discussion Papers 3591, Institute for the Study of Labor (IZA).

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