Country of Origin, Earnings Convergence, and Human Capital Investment: A New Method for the Analysis of U.S. Immigrant Economic Assimilation

Global Labor Organization Discussion Paper, No. 247

53 Pages Posted: 29 Jan 2019

See all articles by Harriet Orcutt Duleep

Harriet Orcutt Duleep

College of William & Mary - Policy School

Xingfei Liu

Concordia University, Quebec

Mark C. Regets

National Foundation for America Policy; IZA Institute of Labor Economics; Global Labor Organization

Date Written: September 1, 2018

Abstract

The initial earnings of U.S. immigrants vary enormously by country of origin. Via three interrelated analyses, we show earnings convergence across source countries with time in the United States Human-capital theory plausibly explains the inverse relationship between initial earnings and earnings growth rates: the good fit between data and theory suggests that variation in initial skill transferability — not variation in the “quality” of human capital — underlies variation in initial earnings. A new method of testing for emigration bias confirms that selective emigration does not cause the convergence. Functional form and sample selections embedded in most recent analyses of immigrant economic assimilation bias downwards the earnings growth of post-1965 U.S. immigrants. When both functional-form and sample-selection constraints are lifted, a dramatically different picture of the economic assimilation of U.S.immigrants emerges.

Keywords: immigrant economic assimilation, human capital investment, country of origin, immigrant earnings convergence, earnings growth, unbiased estimation

JEL Classification: J1, J2, J3, C1

Suggested Citation

Duleep, Harriet Orcutt and Liu, Xingfei and Regets, Mark C., Country of Origin, Earnings Convergence, and Human Capital Investment: A New Method for the Analysis of U.S. Immigrant Economic Assimilation (September 1, 2018). Global Labor Organization Discussion Paper, No. 247, Available at SSRN: https://ssrn.com/abstract=3308584 or http://dx.doi.org/10.2139/ssrn.3308584

Harriet Orcutt Duleep (Contact Author)

College of William & Mary - Policy School ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

Xingfei Liu

Concordia University, Quebec ( email )

Mark C. Regets

National Foundation for America Policy ( email )

2111 Wilson Blvd.
Suite 700
Arlington, VA 22201
United States
571-275-9218 (Phone)

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IZA Institute of Labor Economics

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Global Labor Organization ( email )

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