Economic Assimilation of Mexican and Central American Immigrants in the US: 1965-2017 Giovanni Peri and Zachariah Rutledge University of California, Davis October, 25th, 2019 Giovanni Peri and Zachariah Rutledge Assimilation of Mexican and Central Americans October, 25th, 2019 0 / 24
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Economic Assimilation of Mexican and Central American … · 1985-89arrivals -0.670 -0.445 (0.0463) (0.0342) 1995-99arrivals -0.674 -0.423 (0.0225) (0.0262) 2005-11arrivals -0.732
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Economic Assimilation of Mexican and CentralAmerican Immigrants in the US: 1965-2017
Giovanni Peri and Zachariah Rutledge
University of California, Davis
October, 25th, 2019
Giovanni Peri and Zachariah Rutledge Assimilation of Mexican and Central Americans October, 25th, 2019 0 / 24
Key Question
I This paper analyzes the convergence in weekly earnings andemployment probability of Mexicans and Central Americans to USnatives, starting with the cohort that arrived in 1965-69 to the one thatarrived in 2005-11.
• This is the immigrant group with lowest socio-economic status• Recent studies (e.g. Borjas 2015) argue that immigrant economic
assimilation has worsened with recent cohorts.• Is the US becoming worse at assimilating immigrants?• Can we find some economic-location features associated with faster or
slower convergence?
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Comparison with Europe and Reference Group
I US immigrants have higher employment rates relative to immigrants inmost European countries. Many US immigrants have higheremployment rate than natives.
I But income convergence for some low-skilled groups has been slow.Has it slowed over time?
I As low skilled natives have performed poorly in terms of earnings, lowskilled immigrants may have performed bad relative to average.
I Important:• We need to compare immigrants to similar natives to isolate specific
immigrant-convergence.• We need to keep immigrants comparable over time.
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Importance of Measuring Assimilation/Convergence in theRight Way
I Both initial gap and convergence are important. Need to follow acohort, and look at following cohorts (Borjas (85) vs Chiswick (78)).
I Very important to choose comparable cohorts over time. If theircomposition changes a lot, we are mixing assimilation and selection.
I Very important to compare with natives with same education andage , and not with average natives, otherwise we mix incomeinequality and its dynamic with immigrants’ assimilation.
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Earning Convergence: Pooling Together All Immigrants
I Appearance of increased initial gap and lower convergence.I But...changed composition and comparison with average US.
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Comparison with Same Age Average US Born
I Very important to choose comparable cohorts over time. If theircomposition changes a lot, we are mixing assimilation and selection.Focus on Mexicans and Central Americans.
I In each cross-section, compare with average American with sameage, and estimate a cohort-of-arrival specific gap:
Y`τ � β0 + βC` + ΓX`τ + ε`τ (1)
Y`τ ∈ {ln(w`τ), Emp`τ} is log weekly earnings or employment rate.
X`τ is a third-order polynomial for the individual’s age.
C` is a vector of fixed effects representing each immigrant cohort ofarrival in the sample being considered and native workers.
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Comparison with Same Education-Age Group
I Pool all the cross sections and allow for age-education-year effects, socomparing both arrival gap and growth on average with thecorresponding US-born group:
Note: These figures estimate the population of Mexican and Central American males between the age of 25 and 64 who had between 1and 40 years of potential work experience, were not in school or living in group quarters, had positive earnings, worked at least one weekduring the survey year, and whose year of entry into the U.S. is able to be identified.
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Can We Identify Features Associated with FasterConvergence?
Table 3: Percent of Workforce Comprised of Mexican and Central American Immigrants by Sector and Location
Note: These figures only include US-born, Mexican, and Central American males between the age of 25 and 64 who had between 1 and40 years of potential work experience, were not in school or living in group quarters, had positive earnings, worked at least one weekduring the survey year, and (for immigrants) entered the U.S. at the age of 18 or older.
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Earnings Convergence for Mexicans and CentralAmericans in Four Sectors
A: Agriculture and Farming B: Construction
C: Manufacturing D: Services
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Comparing with Same-Education Natives Across Sectors
Table 4: Relative Entry Wage and Wage Growth of Mexican and Central American Immigrants In First 10 Years by Sector
Note: These figures only include males between the age of 25 and 64 who had between 1 and 40 years of potential work experience, werenot in school or living in group quarters, had positive earnings, worked at least one week during the survey year, and (for immigrants)entered the U.S. at the age of 18 or older.
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Earnings and Employment Rate for Chinese
A: Earnings B: Employment
I Improved earnings for recent cohorts, similar employment probability.I Overtake native performance after 20 years.
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Earnings and Employment Rate for Indians
A: Earnings B: Employment
I Similar earnings for recent cohorts, better employment probability.I Overtake native performance after 10 years.
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Discussion and Conclusions
I Mexican and Central Americans come to the US to do low skilled jobs.I Their performance and assimilation relative to similar natives has been
constant over the last 50 years.I High rate of employment, but some earning gap. This look significantly
better for urban immigrants in construction sector.
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Implications
I US is still great destination for working immigrants.I All this in spite of the very large share of undocumented. Legalization
would increase wages.I Recent immigrant may have done better than earlier, once we account
for initial skills and country of origin.I Census data, always used for this analysis, may contain very large
measurement error.
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