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The Absorption of Highly Skilled Immigrants: Israel, 1990 - 1995

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  • Yoram Weiss
  • Zvi Eckstein

Abstract

This paper develops a descriptive methodology for the analysis of wage growth of immigrants, based on human capital theory. The sources of the wage growth are: (i) the rise of the return to imported human capital; (ii) the impact of accumulated experience in the host country; and (iii) the mobility up the occupational ladder in the host country. We formulate a non-linear model which is estimated, using repeated cross-section data. Using data on immigrants from the former Soviet Union to Israel, we find that upon arrival, immigrants receive no return for imported skills. In the five years following arrival, wages of highly skilled immigrants grow at 8.13% a year. Rising prices of skills, occupational transitions, accumulated experience in Israel, economy-wide rise in wages and repeated sampling account for 4.3, 3.1, 1.6, 1.2 and 2% each. There is convergence to natives in the occupational distribution, but not in wages. In the long run, the return for schooling converges to 0.044 and 0.027 for immigrants in high- and low-skill occupations, respectively, substantially below the 0.073 for natives. The return for experience converges to that of Israelis, and immigrants receive higher return for their unmeasured skills.
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Suggested Citation

  • Yoram Weiss & Zvi Eckstein, 1998. "The Absorption of Highly Skilled Immigrants: Israel, 1990 - 1995," University of Chicago - George G. Stigler Center for Study of Economy and State 140, Chicago - Center for Study of Economy and State.
  • Handle: RePEc:fth:chices:140
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    Cited by:

    1. Yamauchi, Futoshi, 2003. "Are experience and schooling complementary?," FCND discussion papers 166, International Food Policy Research Institute (IFPRI).
    2. Epstein, Gil S. & Gafni, Dalit & Siniver, Erez, 2014. "Even Education and Experience Has Its Limits: Closing the Wage Gap," IZA Discussion Papers 8737, Institute for the Study of Labor (IZA).
    3. Repetto, Gaston & Chiswick, Barry R., 2000. "Immigrant Adjustment in Israel: Literacy and Fluency in Hebrew and Earnings," IZA Discussion Papers 177, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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