Earnings assimilation of immigrants in Norway – A reappraisal

The relative earnings growth for immigrants in Norway is computed. Unlike Hayfron (1998, this journal) we define immigrants by country of origin rather than citizenship and perform separate studies of immigrants from inside and outside the OECD region. Replicating Hayfron op.cit. we find that the earnings assimilation is considerably weaker. Further, we find that the earnings of OECD immigrants are comparable to those of natives, while Non-OECD immigrants earn considerably less than natives at the time of entry, but that their relative earnings improve gradually over time. Earnings of different immigrant cohorts converged from 1980 to 1990, indicating a non-linear rate of assimilation. Received: 7 April 2000/Accepted: 4 January 2001     

Measuring immigrant wage growth using matched CPS files

Cross-sectional estimates of immigrant wage growth have painted an optimistic picture of the ability of immigrants to adapt to the U.S. labor market: Studies using cross-sectional data have generally found the wage growth of immigrants to exceed that of the native born. This optimistic picture of immigrant economic assimilation was challenged by the important finding that compared to earlier immigrant cohorts, recent immigrants started at much lower wages. As such, the high wage growth of immigrants relative to the native born measured in cross-sectional data may simply be the spurious result of declining immigrant earnings ability. In this paper, we match Current Population Survey samples so that the wages of individual immigrant and native-born men can be followed for one year. We find that the wage growth of immigrants does exceed that of the native born. The general finding of faster immigrant wage growth also holds when imposing the foreign-born geographic distribution upon natives, but not when imposing the native-born geographic distribution on the foreign born—a result consistent with some theories of immigrant assimilation. In each comparison, however, the actual wage growth of immigrants relative to natives is similar to the predictions of cross-sectional regressions. This similarity suggests that either there is no cohort quality bias in the cross-sectional estimates of immigrant wage growth, or that there has been a coincidental increase in immigrant wage growth as the entry wages of immigrants have fallen.     

How much did immigrant “quality” decline in late nineteenth century America?

Early twentieth century observers argued that recent American immigrants were inferior, and in particular less skilled, than the old. I estimate wage equations for 1909 allowing for different effects by nationality and for different characteristics on arrival. I then apply the estimated wage differentials to the immigrant composition to measure the effect of changing composition on immigrant earnings. Finally I ask how immigrant earning power changed relative to that of native Americans. I conclude that immigrant “quality” in terms of earnings did decline due to shifting composition but these effects are very small compared with those reported in studies of the post-second World War period. Received: 1 September 1997/Accepted: 6 June 1998     

Does Human Capital Raise Earnings for Immigrants in the Low-Skill Labor Market?

We use monthly Survey of Income and Program Participation data from 1996–1999 and 2001–2003 to estimate the determinants of differentiation in intercepts and slopes for age/earnings profiles of low-skill immigrant and native male workers. Our findings provide further depth of understanding to the“mixed” picture of earnings determination in the low-skill labor market that has been reported by others. On the positive side, many immigrants are employed in similar occupations and industries as natives. Both groups show substantial wage gains over time and generally receive similar returns to years of schooling completed. Immigrants also receive substantial returns to acculturation, measured as age at arrival and English language skill. These results cast doubt on the strong version of segmented labor market theory, in which low-skill immigrants are permanently consigned to dead-end jobs with no wage appreciation. On the negative side, immigrants earn approximately 24% less than natives and are less likely to occupy supervisory and managerial jobs. Latino immigrants receive lower returns to education than do white immigrants. Furthermore, age at arrival and language ability do not explain the lower returns to education experienced by Latino immigrants. These results suggest that Latino immigrants in particular may suffer from barriers to mobility and/or wage discrimination. Whether these negative labor market experiences occur primarily for illegal immigrants remains unknown.     

Do immigrants displace young native workers: The Austrian experience

This paper studies the effect of increased immigration in Austria on the unemployment risk of young natives. Austria experienced a dramatic rise in the share of alien workers as a result of the breakdown of the former communist regimes (especially from former Yugoslavia). We concentrate on unemployment entry of young male workers, who are supposed to compete most heavily with new immigrants. Our results indicate that the detrimental impact – if it exists at all – is only minor. This is irrespective of the analyzed proxy for competition: The share of foreign workers in an industry or in a region. Received: 7 March 1996/Accepted: 20 March 1998     

Binge drinking and labor market success: a longitudinal study on young people

This paper presents a two-equation model of joint outcomes on an individual’s decision to binge drink and on his/her annual labor market earnings. The primary data source is the 1979 cohort of the National Longitudinal Survey of Youth (NLSY79), 1979–1994. We show that binge drinking behavior is quite alcohol-price responsive and is a rational addiction. A new result is that an individual’s decision to binge drink has a statistically significant negative effect on his/her earnings. Furthermore, we conducted simulations of the short-run and long-run impacts of increasing the alcohol price. They showed that the tendency for an individual to binge drink heavily is reduced significantly, and the reduction is greater in the long-run than short-run simulation. Also, an individual's annual earnings were increased. However, in the structural model, an individual’s earnings have no significant effect on his/her tendency to engage in binge drinking. Our results contradict earlier findings from cross-section evidence that showed increased alcohol consumption raised an individual’s earnings or wages.     

Norwegian cohort emigration

This paper introduces a counterfactual technique to estimate net emigration from Norwegian birth cohorts from 1846 to 1900. A main finding is that despite strong fluctuations in annual emigration, the percentage reduction of each cohort due to emigration was surprisingly stable for all cohorts from 1846 to 1886, with net emigration of about 30% for males and about 20% for females. Estimating an econometric model of annual male gross emigration by single years of age 15–60 in the period 1870–1914, we find that previous net emigration from a cohort reduces later gross emigration from the same cohort. The estimations also give some justification for attributing this to selectivity of emigration, in the sense that only a certain proportion of each cohort were potential migrants. Received: 1 October 1997/Accepted: 23 March 2000     

The unemployment insurance compensation experience of immigrants in Canada, 1980-1988

This paper utilizes a new data set, compiled by Citizenship and Immigration Canada, Revenue Canada and Statistics Canada, to examine the unemployment experience of Canadian immigrant cohorts over the time period 1980 to 1988. Using the records of unemployment insurance benefits of persons who immigrated to Canada in those years and who filed income tax returns, the unemployment experiences of those people are compared by landing year, gender, level of education, language ability, and country of last permanent residence. The determinants of the proportion of each immigrant cohort that received unemployment insurance benefits are estimated by relating the proportions to landing year, duration of time in Canada, and labour market conditions. Briefly, we find no obvious influences on UI receipt behaviour following the immigration reforms of 1982. However, the recession of 1981–82 had a major impact on incomes which did not recover until 5 or 6 years later. Nevertheless, more generous UI benefits did raise slightly the likelihood of UI receipts. Received: 5 December 1995 / Accepted: 14 August 1996     

Immigrants at new destinations: how they fare and why

We explore matched employer–employee data for a new destination of international migrants in Europe—Portugal. We conclude that the difference between the earnings of immigrants and natives with similar personal characteristics is for the most part due to the characteristics of the matches they form, immigrants being penalized on two different counts: absence of match-specific human capital and occupational downgrading. Moreover, we show that non-random sorting across workplaces has a significant detrimental effect on immigrants’ wages. This is the flip side of joining migrant-crowded workplaces.     

Cohort size and earnings in Great Britain

Numerous studies in the United States have confirmed that individuals born into large cohorts, ceteris paribus, tend to have lower earnings on entry into the labour force compared to individuals born into small cohorts. On the other hand, only limited attention has been directed towards exploring the relationship between cohort size and earnings in other nations. This paper examines empirically the relationship between cohort size and male earnings in Great Britain. The data used is a time-series of cross-sections (1973–1982) constructed from theGeneral Household Survey. Some support for the hypothesis that large cohorts have depressed earnings is found. However, this effect does not persist as the cohort ages.     

The employment adjustment of male immigrants in England

In this paper the employment performance of native and foreign born men in England is examined, using 1993–1994 data from the Quarterly Labour Force Survey of the United Kingdom. Chiswick's (1982) hypotheses of immigrant employment adjustment are investigated using logistic regression analysis. We show that there are interesting and important employment effects arising from immigrant characteristics. Recent white immigrants experience a transitory employment disadvantage. However non-white immigrants never attain employment equality with native born white men. Education, potential experience, family characteristics and country of birth are also found to be important determinants of employment. Received: 13 September 1998/Accepted: 15 July 1999     

The fortunes of one's birth: Relative cohort size and the youth labor market in the United States

Using two different measures of relative cohort size – one indicating the size and placement of an individual's own birth cohort, and the other, the ratio of young to prime age adults in the United States in that year – it has been possible to isolate strong effects of the population age structure on wages in the United States over the past thirty-three years. These effects have been strong enough that virtually all of the observed change in the experience premium, and a substantial proportion of the changes in the college wage premium, can be explained by the relative cohort size variables alone. Even changes in the amount of within-group variance in wages appear to be largely a function of changing age structure, and absolute wage levels have been strongly affected by these demographic changes, suggesting that population growth can have positive effects on the economy. Received: 27 January 1998/Accepted: 6 June 1998     

Fertility and the Easterlin hypothesis: an assessment of the literature

Focusing just on the fertility aspects of the Easterlin hypothesis, this paper offers a critical assessment – rather than just a selective citation – of the extensive fertility literature generated by Easterlin, and a complete inventory of data and methodologies in seventy-six published analyses. With an equal number of micro- and macro-level analyses using North American data (twenty-two), the „track record” of the hypothesis is the same in both venues, with fifteen providing significant support in each case. The literature suggests unequivocal support for the relativity of the income concept in fertility, but is less clear regarding the source(s) of differences in material aspirations, and suggests that the observed relationship between fertility and cohort size has varied across countries and time periods due to the effects of additional factors not included in most models. Received: 16 July 1996 / Accepted: 26 September 1997     

The decisions of Spanish youth: A cross-section study

This paper presents a simultaneous model for the joint decisions of working, studying and leaving the parental household by young people in Spain. Using cross-section data from the 1990–1991 Encuesta de Presupuestos Familiares, the model is estimated by a two stage estimation method. Endogeneity of the three decisions proves to be important in order to understand the dynamics of household formation. Our results also confirm a number of plausible intuitions about the effect of individual characteristics and economic variables on these decisions, and provide some new insights into the reasons for young people in Spain remaining in large numbers in the parental home. Most of the results are gender independent. Received: 18 September 1998/Accepted: 24 October 2000     

Labor market assimilation and the self-employment decision of immigrant entrepreneurs

This paper uses data from the 1980 and 1990 U.S. Censuses to study labor market assimilation of self-employed immigrants. Separate earnings functions for the self-employed and wage/salary workers are estimated. To control for endogenous sorting into the sectors, models of the self-employment decision are estimated. Self-employed immigrants are found to do substantially better in the labor market than wage/salary immigrants. Earnings of self-employed immigrants are predicted to converge with natives' wage/salary earnings at about age 30 and natives' self-employed earnings at about age 40. Including the self-employed in the sample reduces the immigrant-native earnings gap by, on average, 14%. Received: 10 November 1999/Accepted: 3 August 2000     

A note on the rate of intergenerational convergence of earnings

We show that “convergence” to mean earnings in intergenerational earnings mobility models will be a function not only of the single-generation correlation of earnings, but also of the properties of the unobserved stochastic distribution of shocks to earnings. Received: 24 March 1998/Accepted: 13 November 1998     

IRCA's impact on the occupational concentration and mobility of newly-legalized Mexican men

We examine the occupational concentration and mobility of a group of unauthorized Mexican men who received amnesty under IRCA to shed light on the role of legal status in the assimilation process. Initially these men are concentrated in a small number of traditional migrant jobs. Although their occupational mobility rate is high, it partly represents churning through these same occupations. When we consider the direction – either upward or downward – of occupational change, we find that English language ability and the characteristics of the occupation, itself, are strongly correlated with mobility before legalization. After legalization, few characteristics surpass in importance the common experience of having received amnesty. Received: 22 July 1997/Accepted: 2 February 1999     

Immigrant quality and assimilation: a review of the U.S. literature

Empirical research on US immigrants is reviewed: their productivity and assimilation; their contribution and use of public services; and their impact on native Americans. I discuss the characteristics of cohorts of immigrants that enter the United States at different times, and then quantify the assimilation of immigrants, typically in terms of economic productivity of immigrants compared with natives. Few have found quantifiable negative effects of immigrants on native wages or unemployment in local labor markets, but a more general equilibrium approach than has been empirically implemented may be needed to draw any conclusions regarding the distributional consequences of immigration. Received: 22 September 1995 / Accepted: 2 March 1997     

Immigrant assimilation pre and post labour market entry: evidence from the UK Labour Force Survey

We estimate models of employment an earnings for a sample of white and non-white male immigrants drawn from the Labour Force Survey between 1993 and 2004. Immigrants who arrived to enter the labour market (labour market entrants) are distinguished from those who arrived to complete their education (education entrants). Diverse patterns of labour market assimilation are found depending on ethnicity and immigrant type. Amongst labour market entrants, whites do better than non-whites, whilst amongst education entrants, highly qualified prime-age non-whites perform as well as their white counterparts. Relative to white natives, labour market outcomes for all immigrant groups have a tendency to decline with age.

The ins and outs of unemployment and the assimilation of recent immigrants in Spain

We study the employment assimilation of the recent wave of immigration in Spain for the period 2002–2006. We differentiate the immigrants by their year of arrival in Spain. Following Shimer (Am Econ Rev 95(1):25–49, 2005) and using data from the Spanish Labor Force Survey, we calculate the job finding and the job exit rates. Throughout the period, immigrants show higher job finding and job exit rates. We also present a search and matching model with search intensity, where natives, new immigrants, and old immigrants compete in the labor market. The simulated model is able to reproduce the differences observed in their job finding and unemployment rates.