Abstract
Using Public Use Microdata Samples (PUMS) of the 1970, 1980, and 1990 censuses, we examine the relationship between entry earnings and earnings growth of two cohorts of Asian and European immigrants—those who immigrated between 1965 and 1970 or between 1975 and 1980. We use a non-parametric approach following immigrant cohorts across decennial censuses; this avoids constraining the growth rate of earnings to be the same across year-of-entry cohorts. Our analysis includes non-earners and focuses on median earnings. We find that cohorts of Asian immigrant men have lower entry earnings but higher earnings growth than their European counterparts. We also compare Asian and European immigrants to the native born. We find the earnings of both sets of immigrants surpass the earnings of the native born within 15 years of arrival. Asian immigrants close the gap despite starting in the U.S. with earnings that are about half the earnings of the native born.
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Notes
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- 2.
Self-employment earnings do usually include some return on financial or physical capital that would bias regression coefficients of rates of return. Including these income flows in an assessment of immigrant economic contributions is not problematic. Moreover, our use of the median rather than the mean of earnings reduces the effect of non-labor income flows from the self-employed; we interpret changes in earning over time as primarily resulting from human capital investment.
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An alternative approach to the one we pursue would be to first estimate a parametric model and then, using the predicted values from this model, estimate the correlation between the predicted entry earnings and predicted earnings growth. Although our approach does not make use of information beyond the median within each age/education/country-of-origin cell, the advantage of the approach we pursue is that we can be very certain that our results are not due to a particular set of model assumptions.
- 4.
We define Western Europe as Europe minus the former Soviet Union countries.
References
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Duleep, H. and Regets, M. (1994a) “The Elusive Concept of Immigrant Quality: Evidence from 1960–1980,” (1992 American Economic Association version), Working Paper PRIP-UI-28, Washington, DC: Urban Institute.
Duleep, H. and Regets, M. (1994b) “Country of Origin and Immigrant Earnings,” Working Paper PRIP-UI-31, Washington, DC: Urban Institute.
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Duleep, H. and Regets, M. (1997a) “The Decline in Immigrant Entry Earnings: Less Transferable Skills or Lower Ability?” Quarterly Review of Economics and Finance, vol. 37, Special Issue on Immigration, pp. 189–208.
Duleep, H. and Regets, M. (1997b). “Immigrant entry earnings and human capital growth.” Research in Labor Economics, 16, 297–317.
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Duleep, H., Regets, M.C., Sanders, S., Wunnava, P.V. (2020). The Earnings Growth of Asian Versus European Immigrants. In: Human Capital Investment. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-47083-8_6
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DOI: https://doi.org/10.1007/978-3-030-47083-8_6
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