Earnings Divergence of Immigrants

Kit-Chun Lam and Pak-Wai Liu
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Kit-Chun Lam: Hong Kong Baptist University
Pak-Wai Liu: Chinese University of Hong Kong

Journal of Labor Economics, 2002, vol. 20, issue 1, 86-104

Abstract: From 1981 to 1991 the mean earnings of immigrants fell further behind those of natives in Hong Kong, with the earnings gap widening from 11.3% to 25.5%. Earnings divergence of this magnitude is rather unusual among countries that receive many immigrants. We show that earnings divergence in Hong Kong is mainly due to divergence between skill prices for immigrants' education and for natives' education. Intertemporal shift in the demand for skills caused by economic restructuring in Hong Kong has a differential impact not only on prices of different levels of skill, but also on prices of skills from different sources.

Date: 2002
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