Abstract
This paper identifies the factors influencing earnings gaps between migrants belonging to old immigrant groups (defined as those with long established migration linkages with the receiving country) and those belonging to new immigrant groups. Earnings are conceptualized as a function of human capital, decomposed into the portion acquired in the home country and the portion acquired in the receiving country. It is hypothesized that poor transferability of human capital acquired at home dampens wages more for new than for old immigrant groups. Further, it is hypothesized that upon arrival in the destination, new immigrant groups accumulate human capital faster than old immigrant groups. The empirical analysis focuses on Albanians in the United States as a representative of a new immigrant group and Italians as a representative of an old immigrant group. The analysis is based on pooled data from the 2000 US Census 5 % sample, and the 2001–2007 American Community Survey (ACS) 3 % sample. Findings suggest that (1) Albanian immigrants earn substantially less than Italian immigrants; (2) human capital acquired at home has a positive impact on wages, but the level of human capital transferability is low for Albanians; (3) upon arrival, both Italian and Albanian immigrants accumulate human capital, but the speed of human capital accumulation is faster for Albanians than for Italians.
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Notes
Neither Albania nor Italy has a bilateral agreement with the United States for highly skilled workers.
Several foreign credential evaluation services exist in the United States, but there is no universally employed set of standards when evaluating foreigners’ credentials (USNEI 2008).
For Albanians, the segregation index is a little higher, amounting to 0.52. This result is, however, somewhat expected since Albanians are a much smaller immigrant group than Italians, and the segregation index is sensitive to population size. The dissimilarity index between Italians and Albanians is low, amounting to only 0.26.
The permanent admission policies of the United States have the four objectives: family unification, meeting labor demands in certain occupations, provision of refuge for persecuted persons, and ensuring diversity. Most immigrants admitted to meet the diversity goal belong to new immigrant groups thus come from countries with traditionally low immigration rates. Every year, the United States admits up to 50,000 diversity immigrants, and the maximum per country is 3,850.
The goal of the Bologna Process is the creation of a European Higher Education Area to facilitate the mobility of students and staff throughout the region, quality assurance, and recognition of foreign degrees. Italy joined the process in 1999 and Albania joined in 2003. American universities use involvement in the Bologna Process as a signal of quality.
Steven Ruggles, Matthew Sobek, Trent Alexander, Catherine A. Fitch, Ronald Goeken, Patricia Kelly Hall, Miriam King, and Chad Ronnander. Integrated Public Use Microdata Series: Version 4.0 [Machine-readable database]. Minneapolis, MN: Minnesota Population Center [producer and distributor], 2009. http://usa.ipums.org/usa/.
Since the data refer to different years, wages are deflated with the consumer price index for the years 2000–2007, using 2007 as the base price.
Age at entry is calculated by subtracting age at time of survey from the duration in the United States.
Persons speaking English at home are categorized as English proficient. In addition, for persons speaking a language other than English at home, the ACS and census questionnaires include the question: How well does this person speak English? We categorized respondents as proficient in English if they chose to answer well or very well. For respondents answering not well and not at all the dummy variable Engproficient takes on the value zero.
There is no universal minimum sojourn length for citizenship (Duncan and Waldorf 2009), and the five year requirement does not include the years during which an immigrant had a temporary visa but only refers to the number of years since acquiring a permanent residence permit (green card). Immigrants married to US residents are eligible to apply for US citizenship three years after being issued a green card.
Note that others point out that, in order to avoid the negative effects of brain drain, changes in migration flows are not sufficient and must be accompanied by structural changes in the country itself (see, for example, Glytsos 2008).
State-level information is the smallest level of geographic detail available in the IPUMS data across all samples utilized in the analysis. In order to incorporate data at a more detailed geographic level, the number of observations available would have been significantly reduced.
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Acknowledgments
The authors thank two anonymous reviewers for their valuable input. They also appreciate the helpful comments on earlier versions of the paper, offered by Will Masters, Otto Doering, Elizabeth Dobis, Anna Flaig, Julia Navarro, Samuel Brown, Jing Liu, Shelley Clarke, and the participants of the SHaPE seminar in the Department of Agricultural Economics, Purdue University.
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Mane, K.M., Waldorf, B.S. Human capital and wages: a comparison of Albanian and Italian immigrants. Ann Reg Sci 51, 53–72 (2013). https://doi.org/10.1007/s00168-012-0532-2
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DOI: https://doi.org/10.1007/s00168-012-0532-2