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Wage Mobility of Foreign-Born Workers in the United States

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  • Seik Kim
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Abstract

This paper presents new evidence on whether foreign-born workers assimilate. While the existing literature focuses on the convergence/divergence of mean wages, this study extends the analysis to the distribution of wages by looking at wage mobility. We draw on a first-order Markov-switching model to measure the foreign-native gap in year-to-year transition probabilities from one decile group to another of a wage distribution, where the deciles are determined by a native sample. Using the matched Current Population Survey for 1996 to 2008, our results suggest that age, marital status, and education are important in wage mobility for both foreign-born and native-born individuals and that the majority of foreign-born workers fail to assimilate. Immigrants in top decile groups are more likely to keep up or improve relative to natives, while those in middle and bottom decile groups tend to fall behind. We conclude that the widening foreign-native gap in mean wages with U.S. experience is mostly driven by the middle and bottom decile group immigrants from Central and South America and the bottom decile group immigrants from Asia.

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Paper provided by University of Washington, Department of Economics in its series Working Papers with number UWEC-2009-16.

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Handle: RePEc:udb:wpaper:uwec-2009-16

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  1. 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.
  2. Seik Kim, . "Economic Assimilation of Foreign-Born Workers in the United States: An Overlapping Rotating Panel Analysis," Working Papers UWEC-2008-19, University of Washington, Department of Economics.
  3. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  4. 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.
  5. 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.
  6. Harriet Duleep & Mark Regets, 1997. "Measuring immigrant wage growth using matched CPS files," Demography, Springer, vol. 34(2), pages 239-249, May.
  7. Seik Kim, . "Sample Attrition in the Presence of Population Attrition," Working Papers UWEC-2009-02, University of Washington, Department of Economics.
  8. 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.
  9. 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.
  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.
  11. Moshe Buchinsky & Jennifer Hunt, 1999. "Wage Mobility In The United States," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 351-368, August.
  12. Guillermina Jasso & Mark Rosenzweig, 1982. "Estimating the emigration rates of legal immigrants using administrative and survey data: The 1971 cohort of immigrants to the United States," Demography, Springer, vol. 19(3), pages 279-290, August.
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