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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    1. Robert J. LaLonde & Robert H. Topel, 1992. "The Assimilation of Immigrants in the U. S. Labor Market," NBER Chapters,in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 67-92 National Bureau of Economic Research, Inc.
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    8. Darren Lubotsky, 2007. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 820-867, October.
    9. 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 410-442, June.
    10. Edin, Per-Anders & LaLonde, Robert J. & Åslund, Olof, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Paper Series 2000:13, Uppsala University, Department of Economics.
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    12. Ahlin, Åsa & Johansson, Eva, 2000. "Demand for Local Public Schooling: Another Brick in the Wall," Working Paper Series 2000:12, Uppsala University, Department of Economics.
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    Cited by:

    1. Christian Dustmann, 2014. "Selective Outmigration and the Estimation of Immigrants Earnings Profiles," CReAM Discussion Paper Series 1402, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    2. 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.
    3. Albert Bollard & David McKenzie & Melanie Morten & Hillel Rapoport, 2011. "Remittances and the Brain Drain Revisited: The Microdata Show That More Educated Migrants Remit More," World Bank Economic Review, World Bank Group, pages 132-156.
    4. 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 for the Study of Labor (IZA).
    5. 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.
    6. George J. Borjas, 2013. "The Slowdown in the Economic Assimilation of Immigrants: Aging and Cohort Effects Revisited Again," NBER Working Papers 19116, National Bureau of Economic Research, Inc.
    7. 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.
    8. 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).
    9. 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.

    More about this item

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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