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Immigrant Earnings, Relative to What? The Importance of Earnings Function Specification and Comparison Points

  • Yuengert, A M
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    Immigrant relative earnings estimates are sensitive to the choice of comparison point and the specification of earnings. Non-sample mean comparisons (Borjas, 1985) understate relative earnings. Simple earnings specifications (linear education, quadratic experience) overstate relative earnings for both poorly and well-educated immigrants. Specifications which ignore omitted variables understate the relative earnings of poorly educated immigrants and overstate those of well-educated ones. Although measures of assimilation and changes in immigrant quality are insensitive to earnings specification, they indicate strong earnings growth for post-1964 immigrants, an overall decrease in immigrant quality, and an increase in Mexican immigrant quality. Copyright 1994 by John Wiley & Sons, Ltd.

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    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

    Volume (Year): 9 (1994)
    Issue (Month): 1 (Jan.-March)
    Pages: 71-90

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    Handle: RePEc:jae:japmet:v:9:y:1994:i:1:p:71-90
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