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

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George J. Borjas
Rachel M. Friedberg

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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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15406.

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Date of creation: Oct 2009
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Handle: RePEc:nbr:nberwo:15406

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J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies

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  1. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. 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 201-45, April. [Downloadable!] (restricted)
    Other versions:
  3. 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, vol. 22(3), pages 689-722, July. [Downloadable!]
    Other versions:
  4. 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, vol. 113(2), pages 239-281, April.
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  5. Kristin F. Butcher & John DiNardo, 2002. "The Immigrant and native-born wage distributions: Evidence from United States censuses," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 56(1), pages 97-121, October.
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  6. 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. [Downloadable!] (restricted)
  7. 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, ILR School, Cornell University, vol. 48(4), pages 792-811, July.
  8. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May. [Downloadable!] (restricted)
  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, vol. 18(2), pages 221-51, April. [Downloadable!] (restricted)
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  10. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier. [Downloadable!] (restricted)
  11. 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, 05. [Downloadable!] (restricted)
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  12. 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, in: Issues in the Economics of Immigration, pages 185-226 National Bureau of Economic Research, Inc. [Downloadable!]
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  13. Gordon H. Hanson, 2007. "Emigration, Labor Supply, and Earnings in Mexico," NBER Chapters, in: Mexican Immigration to the United States, pages 289-328 National Bureau of Economic Research, Inc. [Downloadable!]
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  14. Airola, Jim & Juhn, Chinhui, 2005. "Wage Inequality in Post-Reform Mexico," IZA Discussion Papers 1525, Institute for the Study of Labor (IZA). [Downloadable!]
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