The Effect of Literacy on Immigrant Earnings

Ana Ferrer, David Green and W. Craig Riddell

Journal of Human Resources, 2006, vol. 41, issue 2

Abstract: We examine the impact of literacy on immigrant earnings and the sources of lower returns to education and experience among immigrants. We find that the native-born literacy distribution dominates that for immigrants. However, the two groups obtain similar returns to literacy skills, contrary to discrimination-based explanations for immigrant—native-born earnings differentials. Among the university-educated, literacy differences account for about two-thirds of the earnings gap. However, low returns to foreign experience have a larger impact on this differential. Among the less educated, literacy differences and differences in the returns to experience have similar effects on the earnings differential.

Date: 2006
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