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Assimilation via Prices or Quantities? Labor Market Institutions and Immigrant Earnings Growth in Australia, Canada, and the United States

Author

Listed:
  • Antecol, Heather

    () (Claremont McKenna College)

  • Kuhn, Peter J.

    () (University of California, Santa Barbara)

  • Trejo, Stephen

    () (University of Texas at Austin)

Abstract

How do international differences in labor market institutions affect the nature of immigrant earnings assimilation? Using 1980/81 and 1990/91 cross-sections of census data from Australia, Canada, and the United States, we estimate the separate effects of arrival cohort and duration of destination-country residence on immigrant outcomes in each country. Relatively inflexible wages and generous unemployment insurance in Australia suggest that immigrants there might improve themselves primarily through employment gains rather than wage growth, and we find empirically that employment gains explain all of the labor market progress experienced by Australian immigrants. Wages are less rigid in Canada and the United States than in Australia, with the general consensus that the U.S. labor market is the most flexible of the three. We find that wage assimilation is an important source of immigrant earnings growth in both Canada and the United States, but the magnitude of wage assimilation is substantially larger in the United States. These same general patterns remain when we replicate our analyses for two subsamples of immigrants – Europeans and Asians – that are more homogeneous in national origins yet still provide sufficiently large sample sizes for each country.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp802
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    Cited by:

    1. Augustin Coulon & Jonathan Wadsworth, 2010. "On the relative rewards to immigration: a comparison of the relative labour market position of Indians in the USA, the UK and India," Review of Economics of the Household, Springer, vol. 8(1), pages 147-169, March.
    2. Casey Warman, 2007. "You Can Take it with You! The Returns to Foreign Human Capital of Male Temporary Foreign Workers," Working Papers 1125, Queen's University, Department of Economics.
    3. Aydemir, Abdurrahman & Skuterud, Mikal, 2004. "Explication de la deterioration des gains au niveau d'entree des cohortes d'immigrants au Canada, 1966-2000," Direction des etudes analytiques : documents de recherche 2004225f, Statistics Canada, Direction des etudes analytiques.
    4. Ken Clark & Joanne Kathryn Lindley, 2005. "Immigrant Labour Market Assimilation and Arrival Effects: Evidence from the Labour Force Survey," Working Papers 2005004, The University of Sheffield, Department of Economics, revised Jan 2005.
    5. Ken Clark & Joanne Lindley, 2009. "Immigrant assimilation pre and post labour market entry: evidence from the UK Labour Force Survey," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(1), pages 175-198, January.
    6. Matti Sarvimäki, 2011. "Assimilation to a Welfare State: Labor Market Performance and Use of Social Benefits by Immigrants to Finland," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 665-688, September.
    7. Sónia Cabral & Cláudia Duarte, 2013. "Mind the gap! The relative wages of immigrants in the Portuguese labour market," Working Papers w201305, Banco de Portugal, Economics and Research Department.
    8. Picot, Garnett & Sweetman, Arthur, 2011. "Canadian Immigration Policy and Immigrant Economic Outcomes: Why the Differences in Outcomes between Sweden and Canada?," IZA Policy Papers 25, Institute for the Study of Labor (IZA).
    9. Frank Walsh, 2013. "Labour Market Regulation and Migration in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 44(1), pages 85-102.
    10. Abdurrahman Aydemir & Mikal Skuterud, 2004. "Explaining the Deteriorating Entry Earnings of Canada’s Immigrant," Labor and Demography 0409006, EconWPA.
    11. Fernando A. Lozano & Michael D. Steinberger, 2012. "Empirical Methods in the Economics of International Immigration," Chapters,in: Handbook of Research Methods in Migration, chapter 8 Edward Elgar Publishing.
    12. Abdurrahman Aydemir & Mikal Skuterud, 2005. "Explaining the deteriorating entry earnings of Canada's immigrant cohorts, 1966 - 2000," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 641-672, May.
    13. Barry R. Chiswick & Paul W. Miller, 2015. "Negative and Positive Assimilation by Prices and by Quantities," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 18(1), pages 5-28.
    14. Izquierdo, Mario & Lacuesta, Aitor & Vegas, Raquel, 2009. "Assimilation of immigrants in Spain: A longitudinal analysis," Labour Economics, Elsevier, vol. 16(6), pages 669-678, December.
    15. Daniel Hamermesh & Stephen Trejo, 2013. "How do immigrants spend their time? The process of assimilation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 507-530, April.
    16. Gilles Grenier & Serge Nadeau, 2010. "Why is Immigrants’ Access to Employment lower in Montreal than in Toronto?," Working Papers 1005E, University of Ottawa, Department of Economics.
    17. Heather Antecol & Kelly Bedard, 2006. "Unhealthy assimilation: Why do immigrants converge to American health status levels?," Demography, Springer;Population Association of America (PAA), vol. 43(2), pages 337-360, May.
    18. Green, David A. & Worswick, Christopher, 2012. "Immigrant earnings profiles in the presence of human capital investment: Measuring cohort and macro effects," Labour Economics, Elsevier, vol. 19(2), pages 241-259.
    19. Vaira-Lucero, Matias & Nahm, Daehoon & Tani, Massimiliano, 2012. "Socioeconomic Assimilation and Wealth Accumulation of Migrants in Australia," IZA Discussion Papers 6969, Institute for the Study of Labor (IZA).
    20. Clark, Ken & Lindley, Joanne, 2006. "Immigrant Labour Market Assimilation and Arrival Effects: Evidence from the UK Labour Force Survey," IZA Discussion Papers 2228, Institute for the Study of Labor (IZA).
    21. Arthur Sweetman & Casey Warman, 2012. "The Structure of Canada`s Immigration System and Canadian Labour Market Outcomes," Working Papers 1292, Queen's University, Department of Economics.
    22. Mari Kangasniemi & Merja Kauhanen, 2013. "Characteristics and labour market performance of the new member state (NMS12) immigrants in Finland, Germany, the Netherlands and the United Kingdom," Norface Discussion Paper Series 2013002, Norface Research Programme on Migration, Department of Economics, University College London.
    23. Daniel S. Hamermesh & Stephen J. Trejo, 2010. "How Do Immigrants Spend Time?: The Process of Assimilation," NBER Working Papers 16430, National Bureau of Economic Research, Inc.
    24. Jonathan Wadsworth & Augustin de Coulon, 2008. "On the Relative Gains to Immigration: A Comparison of the Labour Market Position of Indians in the USA, the UK and India," CEP Discussion Papers dp0851, Centre for Economic Performance, LSE.
    25. Chiswick, Barry R. & Le, Anh T. & Miller, Paul W., 2006. "How Immigrants Fare Across the Earnings Distribution: International Analyses," IZA Discussion Papers 2405, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    labor market flexibility; immigrant assimilation;

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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