Ethnic enclaves and immigrant earnings growth

Abstract.  The impact of living in an ethnic enclave on earnings growth of immigrants in Canada is examined using the 1981–2001 Censuses. Consistent with U.S. findings, enclaves are found to have a negative impact on the earnings growth of male immigrants. A negative impact is also found for female immigrants. Living in an enclave was found to be particularly harmful for individuals immigrating as adults, especially for females, but did not affect immigrants who arrived at a young age. Enclaves had a more negative impact on high-skilled male immigrants, especially if they had received the bulk of their education outside Canada. Enclaves were also found to hinder language skills.     

Why do immigrant workers in Australia perform better than those in Canada? Is it the immigrants or their labour markets?

Research comparing the labour market performance of recent cohorts of immigrants to Australia and Canada points to superior employment and earnings outcomes in Australia. Examining Australian and Canadian Census data between 1986 and 2006, we find that this performance advantage is not driven by differences in broader labour market conditions affecting all new labour market entrants. Rather, the results from comparing immigrants from a common source country – either the U.K., India, or China – suggest that Australian immigrants perform better, particularly in average earnings, primarily because of a different source country distribution. Moreover, the recent tightening of Australian selection policy, most notably its use of mandatory pre‐migration English‐language testing, appears to be having an effect, primarily by further shifting the source country distribution of immigrants away from non‐English‐speaking source countries, rather than in identifying higher‐quality migrants within source countries.     

Is the new immigration less skilled than the old?

This paper analyzes trends in the skills of immigrants to the US in the post-World War II period. Changes in the supply, demand, and institutional factors determining immigration are analyzed for their implications for immigrant skills. During the past 4 decades immigration has shifted from being predominantly European and Canadian in origin to being predominantly Asian and Latin American, and there have been changes in the criteria for rationing immigration visas. Immigrant skills can be analyzed within the context of a model of the supply of immigrants and the US demand for immigrants. Of the Asian immigrants subject to numerical limitation, the proportion who were occupational preference principals declined from 18.2% in 1970, to 11.9% in 1975, to 8.1% in 1981. A growing stock of the foreign-born population who are illegal aliens may lower immigrant quality; for low-skilled workers in neighboring low-income countries the economic incentives for illegal migration are very large. Immigrants from the UK have the highest annual earnings, with Canadian, other European, South Asian, East Asian, and other American immigrants having successively lower earnings. The Mexicans and the Vietnamese have the lowest earnings. Over the period 1950 to 1980, US immigration changed from primarily drawing immigrants from countries whose nationals have high relative earnings in the US primarily drawing immigrants from countries whose nationals do less well. Recent immigrants are less favorably selected on the basis of their level of schooling. The analysis of the relative earnings of immigrants during the 1970s using 3 data files shows there has been little change for white immigrants, an ambiguous pattern for Mexican immgrants, perhaps a small decline for Cuban immigrants, and a small rise for Asian immigrants. Overall, without returning to rationing by country of origin, public policy could raise immigrant skill levels by changing the balance between kinship and the individual's skills in the rationing of visas.     

Native-immigrant wage differentials in Greece: discrimination and assimilation

This article applies the Blinder–Oaxaca methodology in order to dissect the average earnings differentials between Greek workers and three different groups of immigrants into a part attributed to differences in characteristics and a part due to discrimination. It also seeks to identify the effect of assimilation (i.e. postmigration human capital) on immigrants’ earnings. We use information about 8429 individuals, of which 1185 are immigrants. The data are drawn from the Greek Labour Force Survey (2009). Our results suggest that discrimination is significantly higher for immigrants originating from non-EU countries than it is for EU foreigners, while it is negative for those who terminated education in Greece. Also, there is evidence that (i) post-migration human capital is a significant determinant of immigrants earnings, (ii) there is limited transferability of skills between sending countries and Greece and (iii) education is the main determinant of the wage gap between natives and immigrants.     

Language training,language proficiency and earnings of immigrants in Norway

This paper uses a simple probit model to determine the impact of language training on the language proficiency of Third World immigrant men in Norway. It also estimates the labour market returns to Norwegian language proficiency. The results show that immigrants who participate in language training programme are more likely to acquire speaking and reading proficiencies in Norwegian language than those who do not. Contrary to expectation, language proficiency has no significant effect on immigrants' earnings. A probable explanation may be that immigrants need Norwegian language proficiency to get into jobs in the Norwegian labour market. Once they are in employment, their wages are not necessarily determined by their proficiency in Norwegian. Consistent with the assimilation hypothesis, earlier waves of immigrants have higher earnings than do more recent waves, and part of the initial earnings deficit experienced by more recent immigrants can be attributed to language deficiency. There was no evidence of sample selection bias in the earnings equation.     

Immigration, Language and Multiculturalism in Australia

This paper uses a unique survey on multiculturalism in Australia to explore attitudes towards immigration and multiculturalism. The ethnic backgrounds of immigrants are shown not to matter as long as immigrants are perceived as wanting to become Australian, rather than remaining apart. Australians support government programs to assist the adjustment process, but oppose programs that encourage distinct language and cultural maintenance or foster linguistic/ethnic concentrations. The apprehension that Australians have towards multiculturalism is that they see it as a mechanism for separate cultural preservation. Linguistic enclaves are shown to reduce the acquisition of English language skills among immigrants, whereas positive attitudes among immigrants towards Australia are associated with greater proficiency in speaking, reading and writing English.     

English Proficiency and Earnings of Foreign-Born Immigrants in the USA from 1980 to 2000: The Effect of Minority-Language Enclaves

This paper compares the importance of English proficiency (EP) on earnings among the foreign-born immigrants from 1980 to 2000 and shows its importance varied over time. The key issue examined is changes in the impact of being in a minority-language enclave and its interactions with the return to EP. Results show that the negative effects of enclaves were the greatest in 1990 and such effects were significantly stronger among those fluent English speakers. The relationship between EP and the enclave effects is explored, which confirms their strong interaction in 1990. However, the evidence of fluent speakers' large migrations from enclaves between 1990 and 2000 is not strong, as of the 24 foreign language groups, 13 showed decreases in fluency in enclaves relative to non-enclaves, while 11 showed increases in fluency in enclaves relative to non-enclaves. This may relate to non-wage benefits of living in enclaves, such as social benefits.     

Skill transferability and the earnings of immigrants

Using data on immigrants from the Canadian Census, we compare immigrants who received a bachelor's degree from a Canadian university to immigrants who receive a bachelor's degree in their home country, in order to investigate the returns to skills acquired in Canada versus skills acquired abroad. Our measure of skill is based on postsecondary fields of study linked to the O*NET matrix of skills and competencies. We find that immigrants educated in Canada receive higher returns to their communication skills than those educated abroad. To a lesser degree, they also receive higher returns to their logical and technical skills. These gaps in skill returns explain the entirety of Canadian-educated immigrant's 10% earnings advantage. Our results are robust to controlling for the quality of universities in the immigrant's country of study and for occupation and industry choice. The gaps are stable across time and across quantiles of the immigrant earnings distribution.     

Relative Returns to Skills and Assimilation of Immigrants in Hong Kong

A simple formal model is presented to analyse intercensal changes in the relative earnings of immigrants. A number of factors are analysed, including a change in the relative observed quality of immigrants, a change in the relative prices of observed skills, and assimilation. The model is applied to 1981 and 1991 Hong Kong census data and shows that although there is economic assimilation in the narrow sense at an estimated rate of approximately 1.55 percent p.a., earnings of immigrants diverge from earnings of natives because their relative returns to schooling declined.     

IMMIGRANT EARNINGS: A LONGITUDINAL ANALYSIS

This paper uses the Longitudinal Survey of Immigrants to Australia to analyze the determinants of the level and growth in earnings of adult male immigrants in their first 3.5 years in Australia. The theoretical framework is based on the immigrant adjustment model, which incorporates both the transferability of immigrant skills and selectively in migration. The cross-sectional and longitudinal analyses generate similar findings. The level and relative growth of earnings are higher for immigrants with higher levels of skill and who are economic/skills tested migrants, as distinct from family based and refugee migrants. The analysis indicates that immigrant economic assimilation does occur and that in these data the cross-section provides a good estimate of the longitudinal progress of immigrants. The findings are robust across statistical techniques.     

Technological change,occupational tasks and declining immigrant outcomes: Implications for earnings and income inequality in Canada

The earnings and occupational task requirements of immigrants to Canada are analyzed. The growing education levels of immigrants in the 1990s have not led to a large improvement in earnings as one might expect if growing computerization and the resulting technological change was leading to a rising return to non‐routine cognitive skills and a greater wage return to university education. Controlling for education, we find a pronounced cross‐arrival cohort decline in earnings that coincided with cross‐cohort declines in cognitive occupational task requirements and cross‐cohort increases in manual occupational task requirements. The immigrant earnings outcomes had only a small effect on overall Canadian earnings inequality.     

Human capital accumulation: Evidence from immigrants in low-income countries

This paper offers new evidence on the theory of human capital accumulation. The current findings in developed countries have documented that immigrants' earnings growth exceeds that of natives and that immigrants upgrade their occupations over time. Three possible explanations for these observations are suggested in the literature: 1) immigrants accumulate more human capital than natives, 2) immigrants are not able to fully transfer their skills, so over time, they restore the value of source-country human capital, and 3) immigrants are more productive than natives because they are positively selected on ability. This study investigates the labor market outcomes of immigrants in low-income countries and finds that immigrants earn more than comparable natives and work in better-paid occupations. Over time the gap in earnings and occupational distribution between immigrants and natives narrows. This observation is more consistent with the predictions of human capital accumulation theory than with skill transferability and selection theories.     

The English Language Fluency And Earnings Of Ethnic Minorities In Britain

This study addresses two issues. First it estimates how much of the male and female ethnic earnings gap is the result of an advantage in the English language and whether there is an earnings penalty to non–whites, over and above this. Lack of fluency is shown to have a highly significant impact on the earnings of ethnic minorities in Britain, although the language penalty is much greater for women than it is for men. Moreover, only foreign born non–white males that have arrived in Britain between 1970 and 1994, exhibit lower earnings once language fluency is taken into consideration, whilst British born females exhibit higher earnings. So the evidence here suggests that non–white earnings are assimilating towards those of whites and that lower female non–white earnings are a direct result of a lack of fluency rather than ethnicity. Secondly, the study will try to measure any endogenous bias associated with the non–fluency earnings penalty. Controlling for the endogeneity between language fluency and earnings is shown to be problematic. Estimates suggest that single equation earnings functions slightly underestimate the true language fluency penalty for males, and slightly overestimate the fluency penalty for females. Finally, education and fluency are not surprisingly shown to be complementary.     

The educational attainment of immigrants: trends and implications

"This paper uses the 1970, 1980, and 1990 U.S. Censuses to study trends in educational attainment of immigrants relative to natives. Immigrants have become relatively less highly educated, but have become more highly educated in an absolute sense. The effects of changes in relative educational attainment between immigrants and natives on earnings are studied. Educational differences are found to explain more than half the observed wage gap between the two groups. The paper also allows for non-linearities in returns to education. Sheepskin effects influence earnings in different ways for natives and immigrants. Differences in returns to pre- and post-migration education also appear. The paper also finds evidence that immigrants crowd natives out of education, although the effects are stronger in secondary than in postsecondary education."     

Does host-country education mitigate immigrant inefficiency? Evidence from earnings of Australian university graduates

Imperfect transferability of skills remains a dominant argument in explaining lower earnings of immigrants. Acquisition of host-country education plays a c     

What Holds Back the Second Generation? The Intergenerational Transmission of Language Human Capital Among Immigrants

In 2000 Census microdata, various outcomes of second-generation immigrants are related to their parents' age at arrival to the United States, and in particular whether that age fell within the "critical period" of language acquisition. We interpret this as an effect of the parent's English-language skills and construct an instrumental variable for parental English proficiency. Estimates of the effect of parent's English-speaking proficiency using two-stage least squares yield significant, positive results for children's English-speaking proficiency and preschool attendance, and significant, negative results for dropping out of high school and being below age-appropriate grade. (JEL J13, J24, J62).     

The acquisition and labor market value of four English skills: new evidence from NALS

This study investigates the factors related to proficiency in understanding, speaking, reading, and writing English among immigrants using data from the 1992 National Adult Literacy Survey (NALS). It also investigates the earnings-English relationship for each of these four skills to establish which is more valuable in the labor market. English as a Second Language (ESL) courses, education, and years in the United States are found especially to affect English proficiency. Furthermore, the returns on oral proficiency are greater than the returns on literacy skills, although writing skills are more valuable than reading skills. The study concludes that English acquisition is a dynamic process, rather than static as argued by supporters of English-only legislation. An increased role for ESL courses in the acquisition of English is suggested as an alternative policy to English-only laws as long as the marginal cost is less than the marginal benefit.     

Immigrant earnings: age at immigration matters

A correlation between age at immigration and earnings is observed in Canadian census data. The evidence supports three underlying sources of the effect; first, work experience in the source country yields virtually no return in the host country; second, the return to education varies with age at immigration, and, finally, an 'acculturation' effect is observed for immigrants who are visible minorities or whose mother tongue is not English. Further, it is found that educational attainment, and relatedly earnings, vary systematically across age at immigration with those arriving around age 15 to 18 obtaining fewer years of education. JEL Classification: J61, J31     

The earnings of male immigrants in England: evidence from the quarterly LFS

"In this paper we estimate earnings functions for native born and foreign born white and non-white males in the English labour market, using data from the Quarterly Labour Force Survey.... Our results highlight the importance of distinguishing between native born and foreign born males when investigating the labour market experience of ethnic minorities. Furthermore, the earnings performance amongst white immigrants varies considerably."     

The earnings of Mexican immigrants in the United States

"This paper documents the trends in the earnings of Mexican immigrants during the 1970-1990 period. The empirical evidence indicates that there has been a decline in the relative wage of successive Mexican immigrant waves in the past three decades and that little wage convergence occurs between the typical Mexican immigrant and the typical native worker. The data also suggest that the increasing importance of Mexican immigration is partly responsible for the deterioration in relative skills observed in the aggregate immigrant population, but that there has also been a decline in relative skills even among non-Mexican immigrants."