Mark C. Regets

Measuring immigrant wage growth using matched CPS files

Cross-sectional estimates of immigrant wage growth have painted an optimistic picture of the ability of immigrants to adapt to the U.S. labor market: Studies using cross-sectional data have generally found the wage growth of immigrants to exceed that of the native born. This optimistic picture of immigrant economic assimilation was challenged by the important finding that compared to earlier immigrant cohorts, recent immigrants started at much lower wages. As such, the high wage growth of immigrants relative to the native born measured in cross-sectional data may simply be the spurious result of declining immigrant earnings ability. In this paper, we match Current Population Survey samples so that the wages of individual immigrant and native-born men can be followed for one year. We find that the wage growth of immigrants does exceed that of the native born. The general finding of faster immigrant wage growth also holds when imposing the foreign-born geographic distribution upon natives, but not when imposing the native-born geographic distribution on the foreign born—a result consistent with some theories of immigrant assimilation. In each comparison, however, the actual wage growth of immigrants relative to natives is similar to the predictions of cross-sectional regressions. This similarity suggests that either there is no cohort quality bias in the cross-sectional estimates of immigrant wage growth, or that there has been a coincidental increase in immigrant wage growth as the entry wages of immigrants have fallen.

The decline in immigrant entry earnings: Less transferable skills or lower ability?

A number of hypotheses have been advanced to explain recent declines in the education-adjusted entry earnings of immigrants. One hypothesis suggests that the decline has been caused by the immigration of lower ability immigrants?a result of the relatively unequal income distributions of the source countries currently dominating U.S. immigration. Another hypothesis is that the decline in immigrant entry earnings reflects a change in the extent to which immigrant skills are transferred to the United States. The methodology for this study involved measuring the earnings growth of immigrant cohorts across the 1960?80 censuses to examine these two hypotheses.

Admission Criteria and Immigrant Earnings Profiles

There has been an ongoing concern about the productivity of kinship-based immigrants in the U.S. labor market. Despite the policy importance of this issue, little empirical or theoretical attention has been devoted to learning the effect of different admission criteria on immigrants’ economic performance. To estimate the effect of admission criteria on immigrant earnings profiles, we use 1980 census data on individuals matched to Immigration and Naturalization Service information on admission criteria for country-of-origin/year-of-entry immigrant cohorts. We find that nonoccupation-based immigration, most of which is family-based, is associated with lower entry earnings but higher earnings growth than occupation-based immigration. The higher estimated earnings growth is sufficient for nonoccupation-based immigrants to catch up with occupationally admitted immigrants after eleven to eighteen years in the United States.

U.S. Immigration Policy at a Crossroads: Should the U.S. Continue Its Family-Friendly Policy?

An ongoing debate is whether the U.S. should continue its family-based admission system, which favors visas for family members of U.S. citizens and residents, or adopt a more skills-based system, replacing family visas with employment-based visas. In many ways, this is a false dichotomy: family-friendly policies attract highly-skilled immigrants regardless of their own visa path, and there are not strong reasons why a loosening of restrictions on employment migrants need be accompanied by new restrictions on family-based immigration. Moreover, it is misleading to think that only employment-based immigrants contribute to the U.S. economy. Recent immigrants, who have mostly entered via kinship ties, are economically productive, a fact hidden by a flawed methodology that underlies most economic analyses of immigrant economic assimilation.

Family-friendly and human-capital-based immigration policy

Immigrants who start with low earnings, such as family-based immigrants, experience higher earnings growth than immigrants who are recruited for specific jobs (employment-based immigrants). This occurs because family-based immigrants with lower initial earnings invest in human capital at higher rates than natives or employment-based immigrants. Therefore, immigrants who start at low initial earnings invest in new human capital that allows them to respond to the ever-changing needs of the host country’s economy.