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The Effect of Changes in the U.S. Wage Structure on Recent Immigrants' Earnings

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  • Darren Lubotsky

    (University of Illinois at Urbana-Champaign)

Abstract

Since recent immigrants tend to earn less than natives, their relative earnings have been adversely affected by an increase in the return to labor market skills over the past three decades. Using longitudinal Social Security records matched to cross-sections of the SIPP and CPS, I estimate the return to skills rose by 41% between 1980 and 1997. This reduced the relative earnings of immigrants who arrived in the 1980s and early 1990s by 10 to 15 percentage points. Examining solely the earnings of recent immigrants may lead to an overly pessimistic picture of their actual labor market skills. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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  • Darren Lubotsky, 2011. "The Effect of Changes in the U.S. Wage Structure on Recent Immigrants' Earnings," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 59-71, February.
    • Handle: RePEc:tpr:restat:v:93:y:2011:i:1:p:59-71
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    Cited by:

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    2. Christian Dustmann, 2014. "Selective Outmigration and the Estimation of Immigrants Earnings Profiles," RF Berlin - CReAM Discussion Paper Series 1402, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    3. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2007. "Uncovering the American Dream: Inequality and Mobility in Social Security Earnings Data since 1937," NBER Working Papers 13345, National Bureau of Economic Research, Inc.
    4. Heather Antecol & Peter Kuhn & Stephen J. Trejo, 2006. "Assimilation via Prices or Quantities?: Sources of Immigrant Earnings Growth in Australia, Canada, and the United States," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    5. Brian Duncan & Stephen J. Trejo, 2015. "Assessing the Socioeconomic Mobility and Integration of U.S. Immigrants and Their Descendants," The ANNALS of the American Academy of Political and Social Science, , vol. 657(1), pages 108-135, January.
    6. Antecol, Heather & Kuhn, Peter J. & Trejo, Stephen, 2003. "Assimilation via Prices or Quantities? Labor Market Institutions and Immigrant Earnings Growth in Australia, Canada, and the United States," IZA Discussion Papers 802, Institute of Labor Economics (IZA).
    7. George J. Borjas & Rachel M. Friedberg, 2009. "Recent Trends in the Earnings of New Immigrants to the United States," Working Papers 2009-13, Brown University, Department of Economics.
    8. George J. Borjas, 2021. "The Slowdown in the Economic Assimilation of Immigrants: Aging and Cohort Effects Revisited Again," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 3, pages 31-65, World Scientific Publishing Co. Pte. Ltd..
    9. Ran Abramitzky & Leah Boustan, 2017. "Immigration in American Economic History," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1311-1345, December.
    10. 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.
    11. Mukhopadhyay, Sankar, 2018. "Comparing Wage Gains from Different Immigrant Legalization Programs," IZA Discussion Papers 11525, Institute of Labor Economics (IZA).
    12. Eva Moreno‐Galbis & Jeremy Tanguy & Ahmed Tritah & Catherine Laffineur, 2019. "Immigrants’ Wage Performance in a Routine Biased Technological Change Era: France 1994–2012," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(4), pages 623-673, October.
    13. Deborah Cobb-Clark & Barbara Hanel & Duncan McVicar, 2012. "Immigrant Wage and Employment Assimilation: A Comparison of Methods," Melbourne Institute Working Paper Series wp2012n28, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    14. Randall Akee & Maggie R. Jones, 2019. "Immigrants’ Earnings Growth and Return Migration from the U.S.: Examining their Determinants using Linked Survey and Administrative Data," NBER Working Papers 25639, National Bureau of Economic Research, Inc.

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    JEL classification:

    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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