The Annals of Regional Science

, Volume 51, Issue 1, pp 53–72 | Cite as

Human capital and wages: a comparison of Albanian and Italian immigrants

Special Issue Paper


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.

JEL Classification

F22 J31 J61 


  1. Albania 2009 progress report (2009) Commission of the European Communities Brussels, 14 October 2009Google Scholar
  2. Barro R, Lee J (2010) A new data set of educational attainment in the world, 1950–2010. NBER Working Paper, No 15902Google Scholar
  3. Bauer T, Lofstrom M, Zimmermann K (2000) Immigration policy, assimilation of immigrants and natives’ sentiments towards immigrants: evidence from 12 OECD countries. Swed Econ Policy Rev 7:11–53Google Scholar
  4. Borjas GJ (1994) The economics of immigration. J Econ Lit 32(4):1667–1717Google Scholar
  5. Carliner G (1980) Wages, earnings and hours of first, second and third generation American males. Econ Inquiry 18:87–102CrossRefGoogle Scholar
  6. Cavaioli FJ (2008) Patterns of Italian immigration to the United States. Cathol Soc Sci Rev 13:213–229Google Scholar
  7. Chiswick BR (1978) The effect of Americanization on the earnings of foreign-born men. J Polit Econ 86:897–921CrossRefGoogle Scholar
  8. Chiswick B, Miller P (2009) The international transferability of immigrants’ human capital. Econ Educ Rev 28:162–169CrossRefGoogle Scholar
  9. Duncan NT (2008) Brain drains, brain gains and migration policies. Chapter 13. In: Poot J, Waldorf B, van Wissen L (eds) Migration and human capital. Edward Elgar, CheltenhamGoogle Scholar
  10. Duncan NT, Waldorf B (2009) Becoming a US citizen: the role of immigrant enclaves. CityScape 11(3):5–28Google Scholar
  11. Ekberg J, Hammarstedt M, Shukur G (2010) Immigrant-native earnings differentials: SUR estimation applied on three generations. Ann Reg Sci 45:705–720CrossRefGoogle Scholar
  12. El-Araby Ali A, Ragan JF Jr (2010) Arab immigrants in the United States: how and why do returns to education vary by country of origin? J Popul Econ 23:519–538CrossRefGoogle Scholar
  13. Florax RJGM, de Graaff T, Waldorf B (2005) A spatial economic perspective on language acquisition: segregation, networking and assimilation of immigrants. Environ Plan A 37:1877–1897CrossRefGoogle Scholar
  14. Friedberg RM (2000) You can’t take it with you? Immigrant assimilation and the portability of human capital. J Labor Econ 18:221–251CrossRefGoogle Scholar
  15. Gërmenji E, Gedeshi I (2008) Highly skilled migration from Albania: an assessment of current trends. Center for Economic and Social Studies in Tirana, Albania. Globalisation Working Paper T-25Google Scholar
  16. Glytsos NP (2008) Theoretical considerations and empirical evidence on brain drain: grounding the review of Albania’s and Bulgaria’s experience. Int Migr 48(3):107–130CrossRefGoogle Scholar
  17. Hatton TJ, Leigh A (2011) Immigrants assimilate as communities, not just as individuals. J Popul Econ 24:389–419CrossRefGoogle Scholar
  18. Hu X, Sumption M (2011) Scientists, managers, and tourists: the changing shape of European mobility to the United States. Migration Policy Institute, WashingtonGoogle Scholar
  19. Kosta B (2004) Albania: looking beyond borders. Migration Information Source http://wwwmigrationinformationorg/Feature/displaycfm?id=239
  20. Kule D, Mançellari A, Papapanagos H, Qirici S, Sanfey P (2002) The causes and consequences of Albanian emigration during transition: evidence from micro-data. Int Migr Rev 36(1):229–239CrossRefGoogle Scholar
  21. Lazear E (1999) Culture and language. J Polit Econ 107(S6):95–126CrossRefGoogle Scholar
  22. Ruggles S, Sobek M, Alexander J, Genadek K, Goeken R, Schroeder M. (2010) Integrated public use microdata series: version 5.0 (Machine-readable database). Minnesota Population Center, Minneapolis, MN (producer and distributor)Google Scholar
  23. Stewart JB, Hyclak T (1984) An analysis of the earnings profiles of immigrants. Rev Econ Stat 66(2): 292–296CrossRefGoogle Scholar
  24. US Immigration and Naturalization Service (2009) Yearbook of immigration statistics. http://wwwdhsgov/files/statistics/publications/LPR09shtm
  25. USNEI (2008) Recognition of foreign qualifications. http://www2edgov/about/offices/list/ous/international/usnei/us/edlite-visitus-forrecoghtml 2/26/2008
  26. Vullnetari J (2007) Albanian migration and development: a state of the art review. IMISCOE Working Paper No 18Google Scholar
  27. Waldorf B (1994) Assimilation and attachment in the context of international migration: the case of guest workers in Germany. Papers in regional science. J Reg Sci Assoc Int 73(1):1–26Google Scholar
  28. Waldorf B, Beckhusen J, Florax RJGM, de Graaff T (2010) The role of human capital in language acquisition among immigrants in US metropolitan areas. Reg Sci Policy Pract 2(1):39–49CrossRefGoogle Scholar

Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Department of Consumer Science and RetailingPurdue UniversityWest LafayetteUSA
  2. 2.Department of Agricultural EconomicsPurdue UniversityWest LafayetteUSA

Personalised recommendations