On The Wage Growth of Immigrants: Israel, 1990-2000
This paper develops a descriptive methodology for the analysis of wage growth of immigrants that is based on human capital theory. The sources of the wage growth are (1) the rise of the return to imported human capital, (2) the impact of accumulated experience in the host country, and (3) the mobility up the occupational ladder in the host country. The model implies a nonlinear wage function that includes interactions between imported skills and local wage growth. Using data on native Israelis and immigrants from the former Soviet Union of Israel, we estimate wage equations jointly for the two groups. We find that, upon arrival, immigrants receive no return for imported skills. In the ten years following arrival, wages of highly skilled immigrants grow at 8 percent a year. Rising prices of skills, occupational transitions, accumulated experience in Israel, and an economy-wide rise in wages account for 3.4, 1.1, 1.5, and 1.5 percent each. In the long run, the return for schooling converges to 0.027, substantially below the 0.069 return for natives. We do not reject the hypothesis that the return for experience converges to that of natives and that immigrants receive a higher return for their unmeasured skills. We find that there is some downgrading in the occupational distribution of immigrants relative to that of natives. Moreover, the average wages of immigrants approach but do not converge to the wages of comparable natives. The main reason for this is the low return to their imported skills. (JEL: J24, J31, J60) Copyright (c) 2004 The European Economic Association.
Volume (Year): 2 (2004)
Issue (Month): 4 (06)
|Contact details of provider:|| Web page: http://www.mitpressjournals.org/jeea|
|Order Information:||Web: http://www.mitpressjournals.org/jeea|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan Blinder & Yoram Weiss, 1974.
"Human Capital and Labor Supply: A Synthesis,"
435, Princeton University, Department of Economics, Industrial Relations Section..
- Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
- James Heckman & Lance Lochner & Christopher Taber, 1998.
"Explaining Rising Wage Inequality: Explanations With A Dynamic General Equilibrium Model of Labor Earnings With Heterogeneous Agents,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 1-58, January.
- James J. Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explorations with a Dynamic General Equilibrium Model of Labor Earnings with Heterogeneous Agents," NBER Working Papers 6384, National Bureau of Economic Research, Inc.
- Caballe, Jordi & Santos, Manuel S, 1993. "On Endogenous Growth with Physical and Human Capital," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1042-67, December.
- George J. Borjas, 1998.
"The Economic Progress of Immigrants,"
NBER Working Papers
6506, National Bureau of Economic Research, Inc.
- Weiss, Y. & Gotlibovski, M., 1995.
"Immigration, Search and Loss of Kill,"
34-95, Tel Aviv.
- Cohen-Goldner, Sarit & Eckstein, Zvi, 2002.
"Labour Mobility of Immigrants: Training, Experience, Language and Opportunities,"
CEPR Discussion Papers
3412, C.E.P.R. Discussion Papers.
- Sarit Cohen-Goldner & Zvi Eckstein, 2008. "Labor Mobility Of Immigrants: Training, Experience, Language, And Opportunities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 837-872, 08.
- Cohen Goldner, Sarit & Eckstein, Zvi, 2002. "Labor Mobility of Immigrants: Training, Experience, Language and Opportunities," IZA Discussion Papers 519, Institute for the Study of Labor (IZA).
- LaLonde, Robert J & Topel, Robert H, 1991. "Immigrants in the American Labor Market: Quality, Assimilation, and Distributional Effects," American Economic Review, American Economic Association, vol. 81(2), pages 297-302, May.
- 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.
- Henry S. Farber & Robert Gibbons, 1991.
"Learning and Wage Dynamics,"
NBER Working Papers
3764, National Bureau of Economic Research, Inc.
- George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
- 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.
- Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
- Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-19, December.
When requesting a correction, please mention this item's handle: RePEc:tpr:jeurec:v:2:y:2004:i:4:p:665-695. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Pollock-Nelson)
If references are entirely missing, you can add them using this form.