Foundational Essays in Immigration Economics

The following sections are included:

• About the Author
• Acknowledgments
• Contents

This volume collects the essays that represent what I think are my most important publications on the economics of immigration. I have been working on immigration-related issues since the early 1980s. I never imagined at the time that it would become the research topic that would occupy most of my thinking time and define my career. Nevertheless, as time went by, I realized that the economic approach had never been applied to the study of international immigration, so each question I asked led to another and each new paper raised new puzzles to think about…

This paper reexamines the empirical basis for two “facts” that seem to be found in most cross-section studies of immigrant earnings: (1) the earnings of immigrants grow rapidly as they assimilate into the United States; and (2) this rapid growth leads to many immigrants’ overtaking the earnings of the natives within 10-15 years after immigration. Using the 1970 and 1980 U.S. censuses, this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970-80. It is found that within-cohort growth is significantly smaller than the growth predicted by cross-section regressions for most immigrant groups. This differential is consistent with the hypothesis that there has been a secular decline in the “quality” of immigrants admitted to the United States.

This paper examines the evolution of immigrant earnings in the United States between 1970 and 2010. There are cohort effects not only in wage levels, with more recent cohorts having lower entry wages through 1990, but also in the rate of wage growth, with more recent cohorts experiencing less economic assimilation. The slowdown in assimilation is partly related to a concurrent decline in the rate at which the new immigrants add to their human capital stock, as measured by English language proficiency. The data also suggest that larger national origin groups experience less economic assimilation.

This paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate. The empirical study shows that differences in the U.S. earnings of immigrants with the same measured skills, but from different home countries, are attributable to variations in political and economic conditions in the countries of origin at the time of migration.

This paper analyzes the return migration of foreign-born persons in the United States. We argue that return migration may have been planned as part of an optimal life-cycle residential location sequence. Return migration also occurs because immigrants based their initial migration decision on erroneous information about opportunities in the United States. The study uses the 1980 Census and administrative data from the Immigration and Naturalization Service. Immigrants tend to return to wealthy countries which are not too far from the United States. Moreover, return migration accentuates the type of selection characterizing the immigrant population left in the United States.

This paper analyzes the extent to which ethnic skill differentials are transmitted across generations. I assume that ethnicity acts as an externality in the human capital accumulation process. The skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments, or “ethnic capital.” The empirical evidence reveals that the skills of today’s generation depend not only on the skills of their parents, but also on the average skills of the ethnic group in the parent’s generation.

The socioeconomic performance of today’s workers depends not only on parental skills, but also on the average skills of the ethnic group in the parents’ generation (or ethnic capita/). This paper investigates the link between the ethnic externality and ethnic neighborhoods. The evidence indicates that residential segregation and the external effect of ethnicity are linked, partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised. Ethnicity has an external effect, even among persons who grow up in the same neighborhood, when children are exposed frequently to persons who share the same ethnic background.

IMMIGRATION AND TRADE—particularly with less developed countries (LDCs)—have become more significant to the U.S. economy since the 1960s than they were earlier in the postwar period. The number of immigrants relative to native-born workers has risen; an increasing proportion of immigrants come from less developed countries; and a disproportionate number of immigrants have relatively little schooling. The ratio of exports and imports to GOP has risen as well, and an increasing proportion of imports have come from less developed countries. Immigration and trade have thus increased the effective labor supply of less skilled workers in the United States, with potential consequences for relative wages and employment…

Immigration is not evenly balanced across groups of workers who have the same education but differ in their work experience, and the nature of the supply imbalance changes over time. This paper develops a new approach for estimating the labor market impact of immigration by exploiting this variation in supply shifts across education-experience groups. I assume that similarly educated workers with different levels of experience participate in a national labor market and are not perfect substitutes. The analysis indicates that immigration lowers the wage of competing workers: a 10 percent increase in supply reduces wages by 3 to 4 percent.

This paper presents a theoretical and empirical study of how immigration influences the joint determination of the wage structure and internal migration behavior for native-born workers in local labor markets. Using data from the 1960–2000 decennial censuses, the study shows that immigration is associated with lower in-migration rates, higher out-migration rates, and a decline in the growth rate of the native workforce. The native migration response attenuates the measured impact of immigration on wages in a local labor market by 40 to 60 percent, depending on whether the labor market is defined at the state or metropolitan area level.

It has been difficult to open up the black box of knowledge production. We use unique international data on the publications, citations, and affiliations of mathematicians to examine the impact of a large, post-1992 influx of Soviet mathematicians on the productivity of their U.S. counterparts. We find a negative productivity effect on those mathematicians whose research overlapped with that of the Soviets. We also document an increased mobility rate (to lower quality institutions and out of active publishing) and a reduced likelihood of producing ‘‘home run’’ papers. Although the total product of the preexisting American mathematicians shrank, the Soviet contribution to American mathematics filled in the gap. However, there is no evidence that the Soviets greatly increased the size of the ‘‘mathematics pie.’’ Finally, we find that there are significant international differences in the productivity effects of the collapse of the Soviet Union, and these international differences can be explained by both differences in the size of the émigré flow into the various countries and in how connected each country is to the global market for mathematical publications.

This article brings a new perspective to the analysis of the wage effects of the Mariel boatlift crisis, in which an estimated 125,000 Cuban refugees migrated to Florida between April and October, 1980. The author revisits the question of wage impacts from such a supply shock, drawing on the cumulative insights of research on the economic impact of immigration. That literature shows that the wage impact must be measured by carefully matching the skills of the immigrants with those of the incumbent workforce. Given that at least 60% of the Marielitos were high school dropouts, this article specifically examines the wage impact for this low-skill group. This analysis over-turns the prior finding that the Mariel boatlift did not affect Miami’s wage structure. The wage of high school dropouts in Miami dropped dramatically, by 10 to 30%, suggesting an elasticity of wages with respect to the number of workers between −0.5 and −1.5.

The rapid increase in the size of the immigrant flow reaching the United States, the major changes in the national origin composition of the immigrant population, and the decline in the skills of immigrants relative to the skills of native workers have rekindled the debate over immigration policy. The current debate revives the old concerns over immigrants “taking jobs away” from native workers and finding it difficult to adapt in the American economy, as well as questions whether immigrants pay their way in the welfare state…

MOST STUDIES OF the economic impact of immigration are motivated by the desire to understand how immigrants affect various dimensions of economic status in the population of the host country. This motivation explains the persistent interest in determining whether immigrants “take jobs away” from native workers, as well as the attention paid to measuring the fiscal impact that immigration inevitably has on host countries that offer generous welfare benefits…