Living The American Dream? Wage Outcomes Of Albanian Immigrants In The United States

Immigrants’ human capital and human capital potential is not fully transferrable into wage levels in the host county. Albania is a recent case in point that offers an opportunity for study. Since the collapse of the totalitarian regime in 1990, Albania has undergone drastic demographic changes, fueled by unprecedented levels of emigration and disproportionately large shares of those who are leaving are highly skilled individuals. Albania’s brain drain has received a large amount of research attention over the years, but little is known about the possible brain gain for the host country, or brain waste resulting from the over education of the immigrant labor force. This paper investigates the issue of human capital transferability by examining the labor market experience of this relatively new, little known immigrant group in the United States. The examination pays particular attention to three issues: (1) the success of Albanians relative to Italian immigrants; (2) the role of human capital; and (3) performance differences between emigrants leaving as refugees during the communist era, and those emigrating during the post-communist era. The empirical analysis uses pooled data from the 2000 US Census 5% sample, and the 2001-2007 American Community Survey (ACS) 3% sample, accessed from the Integrated Public Use Micro data Series (IPUMS-USA). Findings of this research suggest that human capital acquired at home has a positive impact on wages, but the level of skill transferability is low for Albanians and human capital acquired in the US has a slightly larger pay-off for Albanian immigrants than for Italian immigrants. Both Italians and Albanians experience returns to assimilation at a decreasing rate. Albanian immigrants earn less than Italian immigrants do, and the gender wage gap among Albanian immigrants is smaller than among Italian immigrants.