Immigrants’ descendants typically assimilate toward mainstream social and economic outcomes across generations. Hispanics in the USA are a possible exception to this pattern. Although there is a growing literature on intergenerational progress, or lack thereof, in education and earnings among Hispanics, there is little research on employment differences across immigrant generations. Using data from 1996 to 2017, this study reveals considerable differences in Hispanics’ employment rates across immigrant generations. Hispanic immigrant men tend to have higher employment rates than non-Hispanic whites and second- and third-plus generation Hispanics. Hispanic immigrant women have much lower employment rates, but employment rates rise considerably in the second generation. Nonetheless, US-born Hispanic women are less likely to work than non-Hispanic white women. The evidence thus suggests segmented assimilation, in which the descendants of Hispanic immigrants have worse outcomes across generations. While relatively low education levels do not appear to hamper Hispanic immigrants’ employment, they play a key role in explaining low levels of employment among Hispanic immigrants’ descendants. Race and selective ethnic attrition may also contribute to some of the patterns uncovered here.
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Studies of educational assimilation among Hispanics and/or Mexican Americans include Farley and Alba (2002), Grogger and Trejo (2002), Trejo (2003), Duncan et al. (2006), Blau and Kahn (2007), Telles and Ortiz (2008), Tran and Valdez (2017), and Duncan and Trejo (2018). This apparent lack of intergenerational progress in education after the second generation may be due in part to bias in who identifies as Hispanic (Duncan and Trejo 2011, 2017; Duncan et al. 2017). We discuss possible bias due to selective identification below.
See the National Academies of Sciences (2015) for a summary of the data and evidence on both intragenerational and intergenerational integration of immigrants.
However, Jiménez et al. (2017) note that intermarried Hispanics are more likely to report their children as Hispanic now than their parents’ generation was 30 years ago.
The remainder are mostly from Spain or South America. The share of immigrants from Mexico, Central America, and the Caribbean who identify as Hispanic is also 88%. Most of the remainder of immigrants from those areas identify as non-Hispanic blacks and are from the Caribbean. We drop people with imputed Hispanic ethnicity or parental birthplace from our CPS sample. We weight observations using their person weight. The results are robust to limiting the sample to housing units in their first of eight waves of participation in the CPS.
About 84% of the second generation with a parent born in Mexico, Central America, or the Caribbean identifies as Hispanic. As with the first generation, much of the remainder identify as non-Hispanic blacks and have at least one parent born in the Caribbean.
Puerto Rico is a US territory, and its residents are US citizens at birth. About 30% of our sample of third-plus generation Hispanics is Puerto Rican.
For discussion of intergenerational assimilation in fertility among Hispanics, see Parrado and Morgan (2008).
We use pooled coefficients instead of coefficients for group A or group B because it is not clear whether the coefficients for either group are the “correct” coefficients. Neumark (1988), among others, discusses this issue and recommends using coefficients from a pooled regression to perform the decomposition.
Results are generally similar if we use probit models instead, with exceptions noted below. Online appendix tables show the probit decomposition results.
We compute the decomposition based on normalized effects so that the choice of the base category for each set of indicator variables does not affect the results, a problem noted by Oaxaca and Ransom (1999) and a solution proposed by Yun (2005). Appendix Tables 12 and 13 show the estimated coefficients with a base category omitted for each set of indicator variables; the estimated coefficients on the age and year fixed effects are not included to conserve space. Full results and Stata do files are available on request.
Online appendix tables show the detailed results for the education, marital status and kids, and unemployment rate variables in the Blinder-Oaxaca decompositions.
The portions of the gap due to differences in estimated coefficients are not statistically significant for second-generation Hispanic immigrant men if we instead estimate probit models.
However, Cutler et al. (2014) find that the duration of unemployment rose more for Hispanics as a whole than for other groups during the recession.
All results discussed but not shown in the tables, including descriptive statistics for subsamples, are available on request.
White, black, and mixed/other race Hispanics make up 93, 3, and 4%, respectively, of Hispanic immigrants; 92, 3, and 5% of the Hispanic second generation; and 90, 5, and 5% of the Hispanic third-plus generation in our CPS sample. For a discussion of racial identification among Hispanics, see Rodriguez (2000) and Pew Research Center (2015).
Until now, Puerto Ricans have been included in the third-plus generation since they are US citizens. In Table 5, “immigrants” from Puerto Rico is all Hispanics living in the US who were born in Puerto Rico; the second generation is Hispanics who have at least one parent born in Puerto Rico; and the third-plus generation is Hispanics born in the US whose ethnicity is reported as Puerto Rican with parents also born in the US Public school education in Puerto Rico is conducted in Spanish, potentially making Puerto Ricans quite different from other US-born Hispanics. The results for the third-plus generation in Tables 2 and 3 are robust to dropping Puerto Ricans from the sample, although the employment gaps relative to whites are about 2 percentage points smaller. The third-plus generation still has a significantly lower employment rate than the second generation (and than whites) when Puerto Ricans are dropped.
In addition to the total portion of the gap due to differences in means not being statistically significant, none of the portions (e.g., age, marital status and family structure, etc.) of the gap due to differences in means are statistically significant for men if we instead estimate probit models.
The decompositions include only the state unemployment rate as a measure of economic conditions. The time fixed effects are not included since the two generations are observed at different points in time.
In addition to the potential reasons offered here, second-generation Hispanics are concentrated in the 25–34 age range. The smaller sample sizes for older age groups contribute to the decline in statistical significance when making intergenerational comparisons for those groups.
We thank an anonymous referee for this point.
We thank Brian Duncan for sharing his program for identifying Hispanic immigrant generations in the NLSY97.
We weight the NLSY97 observations using the round 15 sampling cross-sectional weights to make the sample nationally representative.
As with our CPS sample, we limit our NLSY97 samples of non-Hispanic whites and blacks to those who are US-born children of US-born parents (third-plus generation). The decompositions do not include time fixed effects in the measures of economic conditions since there is little time variation in the sample.
In addition, the relationship between education and employment widens the gap between second- and third-generation Hispanic women and whites, while it narrows the gap for third-generation Hispanic men. However, those results are not statistically significant if we instead estimate probit models.
About 40% of fourth-plus generation Hispanics in our NLSY97 sample appear to be Mexican American and 15% Puerto Rican.
For comparison, other research indicates that 97% of immigrant adults from Latin America or Spain identify themselves as Hispanic, compared with 92% of the second generation, 77% of the third generation, and only one half of the fourth-plus generation (Lopez et al. 2017).
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We thank Marie Mora and participants at the Federal Reserve System’s Disparities in the Labor Market Conference and the 2018 Population Association of America conference as well as seminar participants at the University of Oklahoma and Louisiana State University and three anonymous reviewers for helpful comments on earlier versions of this paper. The views expressed here are solely those of the authors and do not reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System.
Conflict of Interest
The authors declare that they have no conflict of interest.
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Orrenius, P.M., Zavodny, M. Employment Among US Hispanics: a Tale of Three Generations. J Econ Race Policy 2, 3–19 (2019). https://doi.org/10.1007/s41996-018-0021-9
- Immigrant generations
- Employment gaps