Reward for being an immigrant: Earnings gap between immigrant and native-born West Indians

Abstract

Motivated by recent findings of a diminishing earnings gap between the West Indians and other black workers, this study examines the earnings processes of immigrant and native-bornWest Indians in an effort to find the role of culture traits in their earnings. The decomposition of the earnings difference between immigrant and native-born West Indians indicates that a significant amount of the gap is unexplained by the observable labor market characteristics. Most of the observable human capital endowments of the immigrants are treated unfavorably by the market compared to those of the native-born West Indians. The earnings advantage of immigrants attributable to unobserved factors, however, turns out to be more than sufficient to overcome their market treatment adversity. (JEL J15, J31, J61)