Did the decline continue?

Abstract

The issue addressed in this paper is whether or not the decline in immigrant labor-market quality in the U.S. observed in the late 1960’s and 1970’s continued in the 1980vs. Two other papers, Borjas (1995) and Funkhouser and Trejo (1995), have addressed the issue and have come up with contradictory results. In this paper I use a different data set, one that has advantages over the data sets used in the other studies. Given the rise in earnings inequality that has occurred in the United States over the 1980’s, the returns to immigration for the more highly skilled will have increased relative to the low skilled, ceteris paribus. For this reason, it is possible that the skill decline of immigrants may have halted in the 1980’s as immigrants of differing skill levels respond to the altered circumstances they would face in the United States. The empirical results show that the skill decline did indeed halt, a result which gives support to the Funkhouser/ Trejo result.