Essays in Economics of Immigration
This dissertation consists of two related essays on the economics of immigration. The first chapter presents new evidence on whether the earnings of foreign-born workers grow faster than that of similarly educated natives. We compare cross-sectional and panel analyses of assimilation in the U.S. context. The panel data allow us to control for fixed unobserved heterogeneity in earnings. As others have found for earlier entry cohorts, we find that immigrants with less than a college education start at an earnings disadvantage but converge toward native earnings with time in the U.S. in the cross-section. Lower earning immigrants selectively leave on-the-books jobs. We also find substantial selection among low earnings natives who also tend to work less and leave the labor force earlier. Both groups display selection and the net result is that controlling for fixed unobserved heterogeneity has little effect on the relative earnings growth of low-skilled immigrants.
We find very different results for high-skilled workers. In the cross-sectional analysis, immigrants whose highest level of education is a bachelor's degree exhibit a decline in relative earnings with time in the U.S. However, for these immigrants, the inclusion of an individual fixed effect reveals faster earnings growth relative to natives. Among both immigrants and natives, lower earners selectively leave the covered sector. However, because low earning immigrants who remain in the sample become more likely to work with time in the U.S., the net result is that the average earnings of immigrants diminish. These results indicate that controlling for individual heterogeneity is important in estimating the economic assimilation of immigrants.
The second chapter examines the role of the workplace in earnings assimilation. Using an earnings panel much like in the first chapter, we consider whether job characteristics such as firm size, industry, and firm specific tenure can account for earnings differences between native and foreign-born workers. We focus on workers with less than a college education and find that the job characteristics considered account for almost all of the faster earnings growth of high school dropouts and half of the faster earnings growth of high school graduate immigrants. Rising relative job tenure of immigrants is the most important factor.
immigrant relative earnings
Longitudinal Employer-Household Dynamics
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