The Earnings Disadvantage of 21st Century Immigrants in the United States

Abstract

This article provides a comprehensive analysis of the earnings disadvantage of 21st century immigrants in the United States. The study is the first to decompose the earnings disadvantage faced by recent immigrants to present the channels through which immigrants lag behind their native counterparts. The decomposition of the earnings disadvantage reveals that the time spent in the United States is the key determinant of the earnings disadvantage. Other important sources of the earnings disadvantage of immigrants are the levels of English-language proficiency and educational attainment. The decomposition analysis also suggests that low levels of human capital cause an even larger disadvantage for immigrants in the years following the 2008-2009 recession as compared with the corresponding relative returns of the prerecession period. The decomposition analysis and trends in returns to human capital variables highlight the merits of a selective immigration system that favors young, English-speaking, and highly educated individuals. JEL Classifications: J1, J3, J6

The return-on-education gap between hispanics and non-hispanic whites

“…With the increase in immigration enforcement in the last couple of decades it is likely that benefits from migration may have declined for some groups (Gentsch and Massey, 2011), especially those more likely to be perceived as undocumented migrants. For many others, immigrant earnings depend on citizenship status, language ability, time spent in the U.S., and country of origin (Ikpebe and Seeborg, 2018;Massey et al, 2016;Gill and Ahmad, 2018). More specifically, although Mexican immigrants were more likely to remain continuously employed during the Great Recession, they were more likely to experience involuntarily part-time employment, thus reducing the returns to their work (Sisk and Donato, 2016).…”