The Effect of Changes in the U.S. Wage Structure on Recent Immigrants' Earnings

Darren Lubotsky

Labor and Demography from University Library of Munich, Germany

Abstract: Since recent immigrants tend to earn less than natives, their relative labor market status has been adversely impacted by an increase in the return to labor market skills and widening wage inequality over the past two decades. To evaluate the magnitude of this effect, this study uses Social Security earnings records matched to recent cross--sections of the SIPP and CPS to estimate the change in the return to skills among native--born workers. This is then used to adjust the earnings gap between immigrants and natives in order to estimate what the gap would have been if the return to skills had remained at its 1980 level. The results suggest that the return to skills rose by 40 percent between 1980 and 1997, leading to a 10 to 15 percentage point decrease in the relative earnings of recent immigrants. Thus examining solely the earnings of recent immigrants may lead to an overly pessimistic picture of their actual labor market skills.

Keywords: Immigrant earnings and skills; returns to skill; U.S. wage structure (search for similar items in EconPapers)
JEL-codes: C24 F22 J31 J61 (search for similar items in EconPapers)
Date: 2001-10-14
New Economics Papers: this item is included in nep-lab and nep-ltv
Note: Type of Document - Latex; prepared on Unix; to print on HP;
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Related works:
Journal Article: The Effect of Changes in the U.S. Wage Structure on Recent Immigrants' Earnings (2011)
Working Paper: The Effect of Changes in the U.S. Wage Structure on Recent Immigrants' Earnings (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpla:0110003

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