The Mixed Economic Progress of Immigrants

In the midst of large increases in immigration, a relative deterioration in the level of education of immigrants, and slow employment growth, the question of how immigrants perform and progress economically in the United States has once more become salient. This report addresses this question in several unique ways. First, it examines in detail the differences in the rate of economic progress of immigrants from different countries of origin (rather than for all immigrants as a whole) and identifies the reasons for these differences. Second, and for the first time, it assesses whether the economic progress of recent immigrants is slower than that of previous generations of immigrants. Finally, it assesses the economic progress of immigrants in California separately from that of those in the rest of the nation, because, at 26 percent, the share of immigrants in California's labor force is more than three times higher than that in the rest of the United States. Japanese, Korean, and Chinese immigrants enter with wages much lower than native-born workers', their wages increase rapidly, reaching parity within 10 to 15 years. Europeans enter with wages similar to natives' and continue to earn comparable wages. In contrast, Mexican immigrants enter with very low wages and experience a persistent wage gap. Although education is a powerful predictor of earnings and explains some of the disparities in earnings, a substantial difference still exists in earnings profiles between certain immigrant groups and those of native-born workers after differences in education have been adjusted for. Whereas educational attainment may influence the level of earnings at a particular point in time, and it may also enhance the rate of growth of earnings over an immigrant's lifetime, the findings from the study were mixed. Finally, the rate of wage growth has not accelerated for any immigrant groups. Although not problematic for some groups, this finding suggests that the persistent wage gap experienced by, for example, Mexicans and Central Americans, may not diminish in the foreseeable future.