An alternative approach to immigration policy: Rationing by skill

Current U.S. immigration policy places a heavy emphasis on kinship ties with a U.S. citizen or resident alien in rationing immigration visas. An alternative policy is to focus on the skills of visa applicants. Immigrants with higher levels of schooling and with skills that are more readily transferable to the U.S. labor market are more productive, as measured by their earnings. A larger proportion of skilled workers in a cohort of immigrants tends to narrow the differences in earnings among skill groups in the native-born population. This reduces income inequality and reduces the use of income transfers by the low-skilled native-born population. More highly-skilled immigrants also make less use of income-contingent transfers. A point-system would be necessary to combine the multidimensional aspects of skill. The adoption of skill-based rationing with a point system in Canada led to an increase in the skill level of the immigrants.     

AN ECONOMIC ANALYSIS OF STATE SUPPORT FOR HIGHER EDUCATION

There are few practical problems in which the economist has a more direct interest than those relating to the principles on which the expense of the education of children should be divided between the state and the parents.–A lfred M arshall , Principles of Economics     

Language skill definition: a study of legalized aliens

"The robustness of the model for the acquisition of destination language skills is studied using the Legalized Population Survey (LPS) of aliens who received amnesty under the 1986 [U.S.] Immigration Reform and Control Act. The English language proficiency variables include self-assessed overall speaking skills (the census question), speaking and reading skills in specific situations, perceptions as to whether language skills limit job opportunities, and measures of speaking and reading proficiency at work. The model is found to be robust across definitions of proficiency. Proficiency increases with exposure, efficiency and economic incentives for English language acquisition. The panel feature of the data is used to analyze changes in proficiency over time."     

Determinants of bilingualism among children: an econometric analysis

This paper analyzes the determinants of bilingualism (i.e., speaks a language other than English at home) among children age 5–18 years in the American Community Survey, 2005–2011. Two groups of children are considered: those born in the US (native born) and foreign-born children who immigrated prior to age 14 (the 1.5 generation). The analyses are conducted overall, within genders, and within racial and ethnic groups. Bilingualism is more prevalent if the parents are foreign born, less proficient in English, of the same ancestry (linguistic) group, and if the child lives in an ethnic (linguistic) concentration area. Although the effects are relatively smaller, a foreign-born grandparent living in the household increases child bilingualism, while a higher level of parental education tends to decrease it. Children of Asian and Hispanic origin are more likely to be bilingual than their white, non-Hispanic counterparts.     

Testing the immigrant assimilation hypothesis with longitudinal data

This paper is concerned with the comparison of alternative empirical techniques (cross section, synthetic cohort and panel data) for testing the immigrant assimilation hypothesis (IAH). The IAH specifies that immigrants acquire destination relevant human capital, but at a decreasing rate, with duration in the destination. Hence, ceteris paribus, earnings would be expected to increase, at a decreasing rate, with duration. The true assimilation effects may be obscured, however, in analyses of synthetic cohort or panel (longitudinal) data if there are period effects. That is, if the effect on earnings of duration in the destination varies over time. The empirical analysis uses a matched sample of adult male immigrants from the 1983 and 1995 Censuses of Israel. The matched data show that selective exit from the labor force (due to death, absence from the labor force, and inability to match, but not the remigration of immigrants) is associated with lower earnings in 1983. This biases upward the earnings assimilation estimated by the synthetic cohort method. The earnings data are also consistent with the hypothesis that the mass immigration to Israel from 1989 to 1995 raised the return (price) to Israeli-specific human capital among long-duration immigrants sufficiently to more than offset the greater increase in units of destination human capital acquired by more recent immigrants. As a result, long-duration immigrants experienced a steeper increase in earnings from 1983 to 1995. This annulled the true assimilation effects from 1983 to 1995. Longitudinal tests of IAH which assume that the returns to destination-specific skills remained constant (i.e., that there are no period effects) are biased against supporting the IAH if these returns increased.     

Are immigrants and natives perfect substitutes in production?

This article discusses whether immigrant and native labor are perfect substitutes in production when conventional measures of skill and demographic characteristics are held constant. The ratio of immigrant to native labor and the ratio of immigrant to native earnings are studied in 5 major immigrant receiving countries with other variables held constant. Countries included are 1) the US and Britian, where the foreign born are only about 5% to 6% of the adult male labor force; 2) Canada and Australia, where they are about 20% and 30%, respectively; and 3) Israel, where the foreign born are about 3/4 of the Jewish adult male labor force. The relative earnings of adult male immigrants and the adult male native-born sons of immigrants are found to be lower when the labor supply of immigrants is greater. The estimated elasticity of substitution between immigrant and native labor is high, but significantly less than infinity. Workers who are relatively more intensively in the favorable self selection characteristics of immigrants are not perfect substitutes for workers relatively more intensive in country-specific skills. As immigrants increase in the labor force, their relative earnings tend to fall, although the decline is small. Economies have sufficiently flexible markets and develop institutional arrangements to mitigate the relative fail in immigrant earnings as their relative supply increase.     

Immigrant earnings: Language skills, linguistic concentrations and the business cycle

This study of the determinants of earnings among adult foreign-born men using the 1990 Census of Population focuses on the effects of the respondent's own English language skills, the effects of living in a linguistic concentration area, and the effects of the stage of the business cycle at entry into the U.S. labor market. The analysis demonstrates the importance of English language fluency among the foreign born from non-English speaking countries. There is also strong evidence for the complementarity between language skills and other forms of human capital. Furthermore, there is strong evidence using selectivity correction techniques for the endogeneity between language and earnings. Received: 30 November 1999/Accepted: 6 February 2001     

On marriage-specific human capital

This paper develops a model of remarriage for women with particular emphasis on the role of investments in marriage-specific human capital. A distinction is made between marriage-specific skills that are transferable across marriages and those that are specific to a particular spouse. It is hypothesized that transferable marriage-specific skills constitute an asset and a major component of gains from marriage for previously married women. A high level of such skills is expected to be associated with fast remarriage. The presence of children is expected to delay remarriage, because it indicates lower levels of past and future investments that would be relevant to a new partnership. These hypotheses are examined using Cox-regression techniques with data on white and black women from the 1982 National Survey of Family Growth. The empirical results are consistent with the hypotheses. A systematic pattern of race differentials is uncovered, which can be interpreted within the context of the model.We gratefully acknowledge helpful comments and suggestions by anonymous referees and by participants of the Economic Demography Workshop at NORC and the Human Resources Workshop at the University of Illinois at Chicago.