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Immigrant-Native Substitutability: The Role of Language Ability

  • Ethan G. Lewis

Wage evidence suggests that immigrant workers are imperfectly substitutable for native-born workers with similar education and experience. Using U.S. Censuses and recent American Community Survey data, I ask to what extent differences in language skills drive this. I find they are important. I estimate that the response of immigrants' relative wages to immigration is concentrated among immigrants with poor English skills. Similarly, immigrants who arrive at young ages, as adults, both have stronger English skills and exhibit greater substitutability for native-born workers than immigrants who arrive older. In U.S. markets where Spanish speakers are concentrated, I find a "Spanish-speaking" labor market emerges: in such markets, the return to speaking English is low, and the wages of Spanish and non-Spanish speakers respond most strongly to skill ratios in their own language group. Finally, in Puerto Rico, where almost all workers speak Spanish, I find immigrants and natives are perfect substitutes. The implications for immigrant poverty and regional settlement patterns are analyzed.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17609.

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Date of creation: Nov 2011
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Publication status: published as “Immigrant-Native Substitutability and The Role of Language” in Immigration, Poverty, and Socioeconomic Inequality, David Card and Steven Raphael, eds. New York: Russell Sage Foundation, 2013, pp 60-97.
Handle: RePEc:nbr:nberwo:17609
Note: LS
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  1. Eli Berman & Kevin Lang & Erez Siniver, 1999. "Language Skill Complementarity: Returns to Immigrant Language Acquisition," Boston University - Institute for Economic Development 96, Boston University, Institute for Economic Development.
  2. Dustmann, C. & van Soest, A.H.O., 1998. "Language Fluency and Earnings : Estimation with Misclassified Language Indicators," Discussion Paper 1998-120, Tilburg University, Center for Economic Research.
  3. David Card & Ethan G. Lewis, 2005. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," NBER Working Papers 11552, National Bureau of Economic Research, Inc.
  4. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  5. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
  6. Dustmann, Christian & Fabbri, Francesca, 2000. "Language Proficiency and Labour Market Performance of Immigrants in the UK," CEPR Discussion Papers 2487, C.E.P.R. Discussion Papers.
  7. Borjas, George J. (ed.), 2007. "Mexican Immigration to the United States," National Bureau of Economic Research Books, University of Chicago Press, edition 2, number 9780226066325.
  8. Steven Raphael & Eugene Smolensky, 2009. "Immigration and Poverty in the United States," American Economic Review, American Economic Association, vol. 99(2), pages 41-44, May.
  9. Geoffrey Carliner, 1996. "The Wages and Language Skills of U.S. Immigrants," NBER Working Papers 5763, National Bureau of Economic Research, Inc.
  10. Chiswick, Barry R. & Miller, Paul W., 2007. "Occupational Language Requirements and the Value of English in the U.S. Labor Market," IZA Discussion Papers 2664, Institute for the Study of Labor (IZA).
  11. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
  12. David Card, 1997. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," NBER Working Papers 5927, National Bureau of Economic Research, Inc.
  13. Giovanni Peri & Chad Sparber, 2007. "Task Specialization, Comparative Advantages, and the Effects of Immigration on Wages," NBER Working Papers 13389, National Bureau of Economic Research, Inc.
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