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Assimilation via Prices or Quantities? Labor Market Institutions and Immigrant Earnings Growth in Australia, Canada, and the United States

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Author Info

  • Antecol, Heather

    ()
    (Claremont McKenna College)

  • Kuhn, Peter J.

    ()
    (University of California, Santa Barbara)

  • Trejo, Stephen

    ()
    (University of Texas at Austin)

Abstract

How do international differences in labor market institutions affect the nature of immigrant earnings assimilation? Using 1980/81 and 1990/91 cross-sections of census data from Australia, Canada, and the United States, we estimate the separate effects of arrival cohort and duration of destination-country residence on immigrant outcomes in each country. Relatively inflexible wages and generous unemployment insurance in Australia suggest that immigrants there might improve themselves primarily through employment gains rather than wage growth, and we find empirically that employment gains explain all of the labor market progress experienced by Australian immigrants. Wages are less rigid in Canada and the United States than in Australia, with the general consensus that the U.S. labor market is the most flexible of the three. We find that wage assimilation is an important source of immigrant earnings growth in both Canada and the United States, but the magnitude of wage assimilation is substantially larger in the United States. These same general patterns remain when we replicate our analyses for two subsamples of immigrants – Europeans and Asians – that are more homogeneous in national origins yet still provide sufficiently large sample sizes for each country.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 802.

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Length: 48 pages
Date of creation: Jun 2003
Date of revision:
Publication status: published in: Journal of Human Resources, 2006, 41 (4), 821-840
Handle: RePEc:iza:izadps:dp802

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Keywords: labor market flexibility; immigrant assimilation;

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  1. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 104(4), pages 791-836, August.
  2. Paul W. Miller & Leanne M. Neo, 2003. "Labour Market Flexibility and Immigrant Adjustment," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 79(246), pages 336-356, 09.
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  5. 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.
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  10. Khan, Aliya Hashmi, 1997. "Post-migration investment in education by immigrants in the United States," The Quarterly Review of Economics and Finance, Elsevier, Elsevier, vol. 37(Supplemen), pages 285-313.
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  19. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 86(5), pages 897-921, October.
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