Stephen J. Trejo

Why Do Mexican Americans Earn Low Wages

Using Current Population Survey data from November 1979 and 1989, I find that Mexican Americans earn low wages primarily because they possess less human capital than other workers, not because they receive smaller labor market rewards for their skills. Among third‐and higher‐generation men in 1989, Mexicans averaged 21 percent lower wages than non‐Hispanic whites, which is roughly similar to the wage deficit for blacks. For Mexicans, more than three‐quarters of the wage gap is attributable to their relative youth, English language deficiencies, and especially their lower educational attainment. By contrast, these variables explain less than a third of the black‐white wage gap.

Assimilation and the Earnings of Young Internal Migrants

This paper investigates if young internal migrants in the United States experience economic assimilation as they adapt to their new residential location. Using data from the National Longitudinal Survey of Youth, the authors examine how the hourly earnings of interstate migrants are affected by the number of years they have spent in their destination state. Their study indicates that internal migrants initially earn less than natives but that this wage differential disappears within a few years. Moreover, the initial wage disadvantage of internal migrants depends upon the distance moved and economic conditions in the destination labor market. Copyright 1992 by MIT Press.

Assimilation via prices or quantities? Sources of immigrant earnings growth in Australia, Canada and the United States

Using 1980/81 and 1990/91 census data from Australia, Canada, and the United States, we estimate the effects of time in the destination country on male immigrants’ wages, employment, and earnings. We find that total earnings assimilation is greatest in the United States and least in Australia. Employment assimilation explains all of the earnings progress experienced by Australian immigrants, whereas wage assimilation plays the dominant role in the United States, and Canada falls in between. We argue that relatively inflexible wages and generous unemployment insurance in countries like Australia may cause assimilation to occur along the quantity rather than the price dimension.

The Labor Market Skills of Recent Male Immigrants: Evidence from the Current Population Survey

Using data from special supplements to the Current Population Survey (CPS), the authors track the education and hourly earnings of recent male immigrants to the United States. In terms of these measures of labor market skills, the CPS data suggest that immigrants who came in the late 1980s were more skilled than those who arrived earlier in the decade. This pattern represents a break from the steady decline in immigrant skill levels observed in 1940–80 Census data. Despite the encouraging trend over the 1980s, however, the average skills of recent immigrants remain low by historical standards.

The Demand for Hours of Labor: Direct Evidence from California

For many years, California required that most women receive an overtime premium of time and a half for hours of work beyond 8 in a given day. In 1980, this daily overtime penalty was extended to men as well. This situation provides a unique opportunity to estimate the impact of an exogenous increase in the relative price of overtime work. Analyzing Current Population Survey data from 1973, 1985, and 1991 that provide information on daily hours of work, we find that the overtime penalty substantially reduced the amount of overtime worked by California men compared to men in other states. Moreover, this finding persists when we use analogous comparisons for women to control for idiosyncratic shocks that may have affected the California labor market. Our estimates imply that the price elasticity of demand for overtime hours is at least -0.5.

Overtime Pay, Overtime Hours, and Labor Unions

This article analyzes the effect of labor unions on overtime compensation and overtime hours. Estimates from May 1985 Current Population Survey data indicate that unionization increases the prevalence of premium pay for overtime and reduces the incidence and extent of overtime hours. Along with the finding of previous research that unionized workers are more susceptible to temporary layoffs, these results are consistent with a model in which unions use overtime pay to stabilize working hours and expand membership.

National Origin and Immigrant Welfare Recipiency

This paper explores national origin differences in the welfare recipiency of immigrants to the United States. We develop an economic model of immigration which generates implications about how welfare utilization should vary according to characteristics of the country of origin. The empirical analysis reveals that a few source country characteristics explain over two-thirds of the variance of welfare recipiency rates across national origin groups, and changes in the average source country characteristics of the foreign-born population between 1970 and 1980 can account for most of the rise in immigrant welfare use that occurred over the decade.

Intermarriage and the Intergenerational Transmission of Ethnic Identity and Human Capital for Mexican Americans

We investigate whether selective intermarriage and endogenous ethnic identification interact to hide some of the intergenerational progress achieved by the Mexican-origin population in the United States. In part, we do this by comparing an “objective” indicator of Mexican descent (based on the countries of birth of the respondent and his parents and grandparents) with the standard “subjective” measure of Mexican self-identification (based on the respondent’s answer to the Hispanic-origin question). For third-generation Mexican American youth, we show that ethnic attrition is substantial and could produce significant downward bias in standard measures of attainment that rely on ethnic self-identification.

Intergenerational Progress of Mexican-Origin Workers in the U.S. Labor Market

Using unique Current Population Survey data from November 1979 and 1989, this paper compares the wage structure across generations of Mexican-origin men. I find that the sizable earnings advantage U.S.-born Mexican Americans enjoy over Mexican immigrants arises not just from intergenerational improvements in years of schooling and English proficiency, but also from increased returns to human capital for Mexican-origin workers who were born and educated in the United States. Progress stalls after the second generation, however, as the modest gains in human capital that occur between the second and third generations fail to raise the average earnings of Mexican Americans.

Public sector unions and municipal employment

Using 1980 data for a large sample of U.S. cities, the author reexamines recent empirical findings of a positive association between public sector unionization and municipal employment. Several researchers have interpreted this correlation as evidence that public employee unions successfully exert political pressure to raise the demand for municipal services. Structural estimates of labor demand and the determinants of police and fire unionization reveal, however, that economies of scale in union formation are at least partly responsible for any positive association between public sector unionization and municipal employment. The author concludes that previous studies overstate the amount of political clout wielded by municipal labor unions.