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Recent Trends in the Earnings of New Immigrants to the United States

This paper studies long-term trends in the labor market performance of immigrants in the United States, using the 1960-2000 PUMS and 1994-2009 CPS. While there was a continuous decline in the earnings of new immigrants 1960-1990, the trend reversed in the 1990s, with newcomers doing as well in 2000, relative to natives, as they had 20 years earlier. This improvement in immigrant performance is not explained by changes in origin-country composition, educational attainment or state of residence. Changes in labor market conditions, including changes in the wage structure which could differentially impact recent arrivals, can account for only a small portion of it. The upturn appears to have been caused in part by a shift in immigration policy toward high-skill workers matched with jobs, an increase in the earnings of immigrants from Mexico, and a decline in the earnings of native high school dropouts. However, most of the increase remains a puzzle. Results from the CPS suggest that, while average entry wages fell again after 2000, correcting for simple changes in the composition of new immigrants, the unexplained rise in entry wages has persisted.

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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2009-13.

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Date of creation: 2009
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Handle: RePEc:bro:econwp:2009-13
Contact details of provider: Postal: Department of Economics, Brown University, Providence, RI 02912

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  1. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 221-51, April.
  2. James P. Smith, 2006. "Immigrants and the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 203-234, April.
  3. Hirsch, Barry & Schumacher, Edward J., 2003. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," IZA Discussion Papers 783, Institute for the Study of Labor (IZA).
  4. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2003. "Local Unemployment and the Relative Wages of Immigrants: Evidence from the Current Population Surveys," Memorandum 20/2002, Oslo University, Department of Economics.
  5. 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.
  6. Airola, Jim & Juhn, Chinhui, 2005. "Wage Inequality in Post-Reform Mexico," IZA Discussion Papers 1525, Institute for the Study of Labor (IZA).
  7. 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.
  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. Joshua Angrist & Victor Chernozhukov & Iván Fernández-Val, 2006. "Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure," Econometrica, Econometric Society, vol. 74(2), pages 539-563, 03.
  10. Daniel Chiquiar & Gordon H. Hanson, 2002. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," NBER Working Papers 9242, National Bureau of Economic Research, Inc.
  11. Edward Funkhouser & Stephen J. Trejo, 1995. "The labor market skills of recent male immigrants: Evidence from the Current Population Survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(4), pages 792-811, July.
  12. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
  13. Gordon H. Hanson, 2005. "Emigration, Labor Supply, and Earnings in Mexico," NBER Working Papers 11412, National Bureau of Economic Research, Inc.
  14. Guillermina Jasso & Mark Rosensweig & James P. Smith, 2003. "The Earnings of US immigrants," Labor and Demography 0312007, EconWPA.
  15. Kristin F. Butcher & John Dinardo, 2002. "The Immigrant and Native-Born Wage Distributions: Evidence from United States Censuses," ILR Review, Cornell University, ILR School, vol. 56(1), pages 97-121, October.
  16. Harriet Orcutt Duleep & Mark C. Regets, 2013. "The Elusive Concept of Immigrant Quality: Evidence from 1970-1990," Working Papers 138, Department of Economics, College of William and Mary.
  17. 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.
  18. David Card & Ethan Lewis, 2005. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," CReAM Discussion Paper Series 0504, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  19. 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.
  20. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," American Economic Review, American Economic Association, vol. 96(2), pages 189-194, May.
  21. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Trends in U.S. Wage Inequality: Re-Assessing the Revisionists," NBER Working Papers 11627, National Bureau of Economic Research, Inc.
  22. Kaivan Munshi, 2003. "Networks In The Modern Economy: Mexican Migrants In The U.S. Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 118(2), pages 549-599, May.
  23. Guillermina Jasso & Mark R. Rosenzweig & James P. Smith, 1998. "The Changing Skills of New Immigrants to the United States: Recent Trends and Their Determinants," NBER Working Papers 6764, National Bureau of Economic Research, Inc.
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