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Immigrant-Native Substitutability: The Role of Language Ability

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  • Ethan G. Lewis

Abstract

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.

Suggested Citation

  • Ethan G. Lewis, 2011. "Immigrant-Native Substitutability: The Role of Language Ability," NBER Working Papers 17609, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17609 Note: LS
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    References listed on IDEAS

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    1. Christian Dustmann & Arthur van Soest, 2001. "Language Fluency And Earnings: Estimation With Misclassified Language Indicators," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 663-674, November.
    2. 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 246-288, April.
    3. 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.
    4. Geoffrey Carliner, 1996. "The Wages and Language Skills of U.S. Immigrants," NBER Working Papers 5763, National Bureau of Economic Research, Inc.
    5. Barry Chiswick & Paul Miller, 2010. "Occupational language requirements and the value of English in the US labor market," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 353-372, January.
    6. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, July.
    7. 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.
    8. 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.
    9. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    10. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    11. David Card & Ethan G. Lewis, 2007. "The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts," NBER Chapters,in: Mexican Immigration to the United States, pages 193-228 National Bureau of Economic Research, Inc.
    12. Berman, Eli & Lang, Kevin & Siniver, Erez, 2003. "Language-skill complementarity: returns to immigrant language acquisition," Labour Economics, Elsevier, vol. 10(3), pages 265-290, June.
    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.
    14. repec:eme:rlecpp:rlec.2007.27 is not listed on IDEAS
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    Cited by:

    1. Suzanne Kok, 2013. "Returns to Communication in Specialised and Diversified US Cities," CPB Discussion Paper 236, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Sweetman, A. & van Ours, J.C., 2014. "Immigration : What About the Children and Grandchildren?," Discussion Paper 2014-009, Tilburg University, Center for Economic Research.
    3. Protte, Benjamin, 2012. "How does Economic Integration Change Personal Income Taxation? Evidence from a new Index of Potential Labor Mobility," Working Papers 12-20, University of Mannheim, Department of Economics.
    4. Blau, Francine D. & Kahn, Lawrence M., 2012. "Immigration and the Distribution of Incomes," IZA Discussion Papers 6921, 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
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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