5
Immigration's Effects on Jobs and Wages: Empirical Evidence

Building on our first-principles treatment of the economic effects of immigration, this chapter focuses on the empirical evidence concerning immigrants' role in U.S. labor markets. We first address the changing economic status of the immigrants themselves: What is the size of the economic gain to immigrants? What is happening to the labor market skills of recent immigrants compared with those of native-born workers? Are immigrants able to assimilate economically into the U.S. labor market? Most of the literature has examined these issues for male immigrants; to gauge the labor market success of immigrant women, we make comparisons between female immigrants and female natives similar to those we make for men.

The section that follows directly addresses the issue of the impact that immigrants have on native workers' earnings and employment. We start our treatment of this central issue with a theoretical discussion that places some constraints on how large or small these impacts on native workers can be. This theoretical treatment is complemented by a summary of the empirical evidence on the size of the wage and employment effects on native workers.

The bulk of research has looked for the effects of immigration on labor market outcomes. However, immigration may also alter product markets, raising or lowering the prices of alternative goods and services by different amounts. Since Americans do not consume all goods in the same proportions, some may gain more than others as these prices change. The final section of this chapter presents new evidence on the impact of immigration on the prices of goods. By doing so,



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--> 5 Immigration's Effects on Jobs and Wages: Empirical Evidence Building on our first-principles treatment of the economic effects of immigration, this chapter focuses on the empirical evidence concerning immigrants' role in U.S. labor markets. We first address the changing economic status of the immigrants themselves: What is the size of the economic gain to immigrants? What is happening to the labor market skills of recent immigrants compared with those of native-born workers? Are immigrants able to assimilate economically into the U.S. labor market? Most of the literature has examined these issues for male immigrants; to gauge the labor market success of immigrant women, we make comparisons between female immigrants and female natives similar to those we make for men. The section that follows directly addresses the issue of the impact that immigrants have on native workers' earnings and employment. We start our treatment of this central issue with a theoretical discussion that places some constraints on how large or small these impacts on native workers can be. This theoretical treatment is complemented by a summary of the empirical evidence on the size of the wage and employment effects on native workers. The bulk of research has looked for the effects of immigration on labor market outcomes. However, immigration may also alter product markets, raising or lowering the prices of alternative goods and services by different amounts. Since Americans do not consume all goods in the same proportions, some may gain more than others as these prices change. The final section of this chapter presents new evidence on the impact of immigration on the prices of goods. By doing so,

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--> it attempts to identify the American households that benefit the most and those that gain the least from these changing prices.1 The Economic Gain to Immigrants In the previous chapter, we argued that immigrants expect that they themselves will gain from immigration, or they would not come. But how large are these economic benefits to immigrants? Although the question is straightforward, it is amazing how little direct evidence exists on the magnitude of their actual economic benefits. Some thorny conceptual issues beset comparison of standards of living across countries, but the primary reason for the lack of knowledge is that survey data contain little information about immigrants' lives before they came to America. As a not atypical example, the decennial census questionnaire asks no direct questions about how immigrants fared in labor markets at home. Given this paucity of direct evidence, the best we can do is make some simple contrasts between what immigrants earn here compared with average wages in the major sending countries.2 There are two salient facts in describing wages in the United States relative to those of potential sending countries. First, wages in the United States are high relative to those in the less economically developed sending countries, such as the Philippines, Mexico, and the other Central and South American countries. Second, dispersion in wages in the United States is high relative to that in most of the developed sending countries, including those in Western Europe and Canada. The implication is that immigration to the United States should be attractive to most workers from less economically developed countries and that skilled workers from many developed countries may want to emigrate into the United States.3 These implications appear to be broadly consistent with migration patterns—for example, unskilled labor from Mexico and skilled labor from Western Europe. As a rough gauge on relative standards of living, Table 5.1 lists gross domestic product per capita for the principal source countries. This table illustrates the 1   There are other interesting issues that the panel did not consider because it was necessary to limit the scope of the report. Among them are the effects of immigration on family income (as opposed to individual earnings) and the contribution of immigration to the rise in individual and family income inequality over the past 20 years. 2   One difficulty with such comparisons is that immigration may be highly selective relative to home country traits. 3   These implications are strictly true as long as productivity differences among workers do not fully account for these wage differences between the United States and the sending countries. The extent to which productivity differences can fully account for these differences is a source of considerable debate. Unlimited free trade or immigration would imply that wages would tend to equalize across nations (factor price equalization). Current estimates of productivity adjustments suggest that productivity-related factors can explain only some of these intercountry wage differences, leaving large wage differences and large gains from migration.

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--> TABLE 5.1 Per Capita Gross Domestic Product Measures, for Selected Countries, 1992 Region and Country GDP Per Capita Relative to U.S. GDP Per Capita Europe Austria 73.2 16,989 Czechoslovakia 23.2 5,066 France 78.5 18,232 Germany 87.0 20,197 Greece 39.0 8,203 Hungary 24.9 5,780 Italy 72.0 16,724 Poland 21.1 4,907 Portugal 41.3 9,005 U.S.S.R. 41.9 8,780 United Kingdom 70.2 16,302 Yugoslavia 25.0 5,467 Asia Cambodia NA NA China 7.9 1,838 India 7.0 1,633 Iran 17.9 4,161 Japan 85.8 19,920 Korea 42.1 9,358 Laos 7.7 1,710 Lebanon NA NA Philippines 9.4 2,172 Taiwan 45.1 9,850 Vietnam NA NA North and South America Argentina 25.3 5,532 Canada 90.3 20,970 Colombia 18.3 4,254 Cuba NA NA Dominican Republic 12.6 2,918 Ecuador 14.7 3,420 Guatemala 12.4 2,888 Haiti 4.6 957 Jamaica 13.4 2,978 Mexico 33.9 7,867 Nicaragua 6.6 1,441 Panama 17.7 4,102 Peru 11.3 2,602

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--> Region and Country GDP Per Capita Relative to U.S. GDP Per Capita Africa Egypt 9.8 2,274 Ethiopia NA NA Nigeria 4.9 1,132 South Africa 16.7 3,885 Oceania Australia 79.7 18,500 United States 100.0 23,220 Note: GDP = gross domestic product; NA = not available. GDP figures are in constant dollars adjusted for changes in terms of trade. 1991 data was used for Greece, Jamaica, Korea, and Laos. 1990 data was used for Argentina, Czechoslovakia, Nicaragua, Portugal, Taiwan, and Yugoslavia. 1989 data was used for Haiti and U.S.S.R. Source: National Bureau of Economic Research, Penn World Data Set. WWW site. National Bureau of Economic Research, February 4, 1997. tremendous variation in incomes among the sending countries as well as the large gap between some of these countries and the United States. For example, gross domestic product (GDP) per capita in the United States is roughly 7 times as large as that in Ecuador and 15 times as large as that in Nicaragua. The disparity is three to one with the largest source country, Mexico. With the exception of Japan, income disparities are also quite large with many of the Asian sending countries—a ratio of 11 to 1 with the Philippines and 14 to 1 with India and China. The disparities with Western Europe are considerably smaller, and with many of the Eastern European nations they run as much as 5 to 1. Collectively, the data in Table 5.1 suggest that many immigrants experience large economic benefits from migrating to the United States. Immigrant wages in the United States typically far exceed those in their home countries. How do they compare with the wages of native-born workers? And what factors account for any immigrant wage deficit that may exist? Tables 5.2 and 5.3 answer the first question. For example, the hourly wages of foreign-born men in 1990 were 7 percent lower than those of native-born male workers, and annual earnings were 15 percent lower (Table 5.2). These gaps vary greatly across the sending countries, ranging from wages that are only one-half of native wages among recent Mexican male immigrants to wage premiums among European and Canadian male immigrants. Recent arrivals earned considerably less than natives throughout the last three decades. The wage gap between recent immigrants and natives widened substantially in more recent years: in 1970 the gap for men was about 10 percent of native wages; in 1990 it was 22 percent. Gaps in men's annual earnings were larger than those in hourly wages but showed a similar trend, widening from about 19 percent in 1970 to about 35 percent in 1990.

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--> TABLE 5.2 Average Hourly Wages and Earnings of Foreign-Born and Native Men in 1970, 1980, and 1990, Civilian Employed, Ages 25-64, 1995 Dollars   1970 1980 1990 Nativity and Time of Arrival Hourly Annual Hourly Annual Hourly Annual Native-born $19.00 $37,212 $19.83 $37,591 $19.41 $37,551 All foreign-born 19.29 36,043 18.93 34,164 18.06 31,935 Recent arrivals 17.08 30,156 16.18 27,107 15.17 24,318 Europe and Canada 19.20 35,779 20.04 36,648 21.52 41,957 Asia 18.09 29,863 17.54 29,548 16.97 28,026 Africa and Oceania 19.03 27,439 18.06 29,387 19.95 25,446 Other Americaa 15.00 26,259 14.68 23,035 13.04 19,594 Mexico 11.74 20,165 12.11 18,911 9.71 14,251 Earlier arrivals 20.40 38,981 20.71 38,750 20.06 37,228 Europe and Canada 21.69 41,942 22.45 43,299 24.07 47,270 Asia 20.00 37,980 24.00 46,883 24.67 46,385 Africa and Oceania 17.77 33,477 24.25 46,833 19.05 36,746 Other Americaa 17.87 32,506 18.19 33,011 18.78 33,564 Mexico 13.57 24,498 15.97 26,153 13.17 21,846 Notes: Recent arrivals are defined as foreign-born men who arrived in the 10 years preceding the census year, and earlier arrivals include all other foreign-born men in the sample. Hourly wages are computed by dividing annual earnings from wages and self-employment income by weeks worked and average hours per week. The sample is men aged 25-64 years who worked at some point in the preceding year, were not self-employed, did not reside in group quarters, and were not in the armed forces at the time of the census. a ''Other America" includes Central America, the Caribbean, and South America. The widening gap between recent immigrants and natives is accounted for at least in part by the shift in immigrants' home countries: immigrants in 1990 included large numbers from Latin America and Asia, whereas in 1970 a larger share came from Europe. Recent male immigrants from Europe did well relative to natives throughout this period, moving from a slight deficit in earnings relative to natives in 1970 to substantially higher earnings in 1990. In contrast, recent male immigrants from the countries that are now the dominant sources (in Asia and Latin America) earned much less than natives. For instance, wages and annual earnings of recent male immigrants from Mexico were less than half those of native-born workers, and they were also substantially below those of recent male immigrants from other regions.4 4   Male immigrants who had been in the United States for more than 10 years at the time of the census have much better labor force outcomes than did more recent arrivals. This group had somewhat higher wages than did natives in each of these years, but also had some decline in wages and earnings relative to natives, although the magnitude of that change was much smaller. Earlier arrivals as a group fared well relative to native-born workers, but there were substantial differences across region of origin for this group as well, with earlier immigrants from Mexico, Central America, and the Caribbean having substantially lower wages than those from Europe and Asia.

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--> TABLE 5.3 Average Hourly Wages and Earnings of Foreign-Born and Native Women in 1970, 1980, and 1990, Civilian Employed, Ages 25-64, 1995 Dollars   1970 1980 1990 Nativity and Time of Arrival Hourly Annual Hourly Annual Hourly Annual Native-born $12.70 $14,899 $12.63 $16,805 $13.42 $20,196 All foreign-born 13.02 15,338 12.63 16,604 13.23 19,154 Recent arrivals 11.82 13,894 11.71 14,606 11.64 15,157 Europe and Canada 12.46 14,254 11.98 14,953 14.76 18,841 Asia 13.71 15,196 12.61 16,743 12.84 17,669 Africa and Oceania 9.99 12,870 13.81 15,807 12.81 16,863 Other Americaa 10.81 14,086 11.10 13,255 10.22 13,178 Mexico 10.11 8,823 9.47 10,067 8.08 8,738 Earlier arrivals 13.62 16,082 13.11 17,663 14.06 21,242 Europe and Canada 13.75 16,378 13.06 17,561 14.40 21,963 Asia 13.70 16,285 15.23 21,975 16.53 26,175 Africa and Oceania 14.72 16,261 13.81 19,570 14.54 21,832 Other Americaa 13.42 16,533 13.07 18,064 13.97 21,195 Mexico 10.97 11,770 11.11 12,448 9.89 12,803 Notes: Recent arrivals are defined as foreign-born women who arrived in the 10 years preceding the census year, and earlier arrivals include all other foreign-born women. Hourly wages are computed by dividing annual earnings from wages and by weeks worked and average hours per week. The sample is women aged 25-64 years who worked at some point in the preceding year, were not self-employed, did not reside in group quarters, and were not in the armed forces at the time of the census. a "Other America" includes Central America, the Caribbean, and South America. Similar patterns appear in comparing the hourly wages and annual earnings of native and foreign-born women (Table 5.3). Recent arrivals have lower wages and earnings than native women; this gap has widened over time, whereas earlier arrivals fare well relative to natives throughout the period. The same diversity in economic outcomes exists across sending countries. However, the wage gap between recent arrivals and others is generally smaller for women than for men, as is the variation in wages across region of origin. One gender difference of note involves the changing standard (native-born wages) to which immigrants' wages are being compared over time. For men, the wages of natives were quite flat over the past few decades and, consequently, the growing gap implies an absolute decline in the real wages and earnings of recent immigrants. In contrast, the real wages of native-born women have been rising, so that the widening of the gap among women is consistent with flat or rising wages of immigrants.5 5   The other noticeable gender difference is that, for women, the widening in the gap between recent immigrants and natives was much more dramatic for earnings than for wages. For men, the change in

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--> Mean wage disparities between immigrants and the native-born hide considerable diversity. One way of measuring this diversity across the full distribution of wages is to first rank natives by their wages into 10 equal deciles. If natives and the foreign-born had precisely the same wage distribution, 10 percent of the foreign-born would also be placed in each of those deciles. These distributions are presented in Table 5.4 for the six largest immigration states, for California taken alone, and for Los Angeles. This table demonstrates that immigrants are disproportionately at the bottom of the wage distribution. This concentration is particularly strong in places where immigrants make up a substantial share of the population. For example, in the six states receiving the largest number of immigrants between 1980 and 1990 (California, Florida, Illinois, New York, New Jersey, and Texas), 17.7 percent of immigrants fall in the bottom decile of the native wage distribution. For the state with the highest concentration of immigrants, California, this proportion is 22.7 percent, and for a high-immigration city, Los Angeles, it rises to 29.5 percent.6 The overrepresentation of immigrants in the bottom rung of the wage ladder is even more dramatic for the most recent arrivals. For those immigrants who arrived within five-years of the 1990 census year, 27.5 percent have wages in the lowest wage decile in the top six immigrant states, compared with only 13.7 percent of those who came before 1980. The concentration is even more pronounced in California and Los Angeles. For example, 44.5 percent of all recent immigrants living in Los Angeles in 1990 have wages below that of a native-born worker at the lowest decile. In large immigrant cities like this, immigrants earn wages that place them disproportionately in the lowest economic stratum. What explains these wage disparities between the native-born and immigrants, especially those from sending countries, such as Mexico, whose wage deficits are huge? The disparities could be due to differences in the skills that immigrants and the native-born bring to the labor market, or to overt or covert discrimination against immigrants. Such discrimination would not be difficult to exercise, because the foreign-born may be easy to identify. Skill differences could emerge for a number of reasons, including the schooling gap (in both quantity and quality) between immigrants and natives and the quality of their respective labor market experiences. The latter may be particularly relevant for older immigrants, whose experience in their home countries may not be as highly valued in the U.S. labor market. For the most part, the available studies attribute much of the wage gap between many immigrant groups (particularly those from poorer countries) and na-     the gap was only 4 percent larger for earnings than for wages, whereas for women, the change in the gap was 12 percent larger for earnings. This reflects the rapid increase in employment rates experienced by native women. 6   This is not just an artifact of the larger share of immigrants in the population; no matter what that share, the sum of the representation of immigrants in each of the deciles has to be 100 percent.

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--> TABLE 5.4 Distribution of 1990 Hourly Wages of the Foreign-Born Angeles (percentage) by Native Wage Decile, for Immigration States, California, and Los         Foreign-born, by Time of Arrival Area Decile Natives Foreignborn 1985-90 1980-84 Before 1980 Immigration States 1 10 17.7 27.5 21.8 13.7   2 10 14.5 19.4 17.8 12.1   3 10 12.0 12.4 13.6 11.3   4 10 10.1 9.1 10.5 10.3   5 10 9.0 7.0 8.6 9.6   6 10 8.1 5.8 7.3 9.0   7 10 7.2 4.7 5.7 8.4   8 10 7.0 4.4 5.1 8.3   9 10 6.9 4.3 4.7 8.3   10 10 7.5 5.5 4.9 9.0 California 1 10 22.7 37.0 27.1 17.0   2 10 17.8 21.0 21.0 15.6   3 10 12.1 11.2 12.9 12.1   4 10 9.3 7.2 9.2 10.0   5 10 8.0 5.5 7.5 8.9   6 10 6.6 4.1 5.5 7.7   7 10 6.1 3.6 4.6 7.4   8 10 5.8 3.4 4.2 7.2   9 10 5.5 3.1 4.0 6.8   10 10 6.0 3.9 4.1 7.2 Los Angeles 1 10 29.5 44.5 35.9 22.4   2 10 18.0 19.3 19.9 16.9   3 10 11.7 10.1 11.3 12.4   4 10 8.4 6.2 8.2 9.2   5 10 6.9 4.6 6.0 7.9   6 10 6.0 3.6 4.9 7.1   7 10 5.1 3.1 3.7 6.3   8 10 5.1 2.8 3.7 6.3   9 10 4.6 2.7 3.1 5.7   10 10 4.7 3.1 3.3 5.9 Notes: The states included are California, Florida, Illinois, New York, New Jersey, and Texas. The foreign-born are assigned to a decile if their wage falls above the cutoff point for the next lower decile and at or below the cutoff point for the next higher decile. Cutoff points are defined to put 10 percent of wages of the native-born in each decile (within the given area), so the percentage in the native column is 10 by definition. However, since many individuals can have the same wage, applying that assignment rule to natives assigns slightly more or less than 10 percent in some cases.

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--> tives to underlying skill differentials. In particular, a great deal of evidence suggests that much of the wage differential between Hispanics and non-Hispanics is due to differences in observed socioeconomic characteristics, particularly education and English language proficiency. For example, Reimers (1983) found that differences in observed socioeconomic characteristics accounted for 27 of a 34 percentage point wage difference between white non-Hispanic men and men of Mexican ancestry. Her results indicated that, for men of Cuban ancestry, adjusting for observable differences more than accounted for the entire wage differential, whereas for "other Hispanic" men, observable characteristics accounted for roughly half of a 23 percent wage differential. McManus et al. (1983) found that there was no statistically significant difference in wages between non-Hispanic white men and Hispanic men who were proficient in English, once adjustments were made for other differences in socioeconomic characteristics. Similarly, Smith (1997) found that, after controlling for differences in education, geographic location, language, and time since immigration, there was little remaining wage difference between Hispanics and native-born whites. The evidence, therefore, is not consistent with the hypothesis that widespread labor market discrimination results in substantially reduced wages for immigrant Hispanic and Asian groups. Our conclusion about the relatively minor role that discrimination plays in aggregate labor market outcomes of immigrants should not be misunderstood. In particular, it is not meant to deny that immigrants in their daily lives encounter many instances of verbal and nonverbal abuse. Such abuse occurs with far too great frequency, and it stings. The import of our conclusion is that discriminatory actions of this kind do not lead to a significant wage penalty in the labor market. To sum up, most immigrants who come to the United States enjoy substantial economic benefits, in that wages are considerably higher here than in their home countries. There is a great deal of diversity among immigrants in their incomes in the United States. For both male and female immigrants, the lowest wages are received by recent immigrants and by immigrants from Mexico, Central America, and South America. The size of the wage gap between recent immigrants and natives has widened substantially in recent years. Finally, there appears to be little evidence of substantial wage discrimination against immigrants. Trends in Immigrant Skills We have argued in this volume that the skill composition of immigrants helps determine the distributional impact of immigration on the employment opportunities of native-born workers. In Chapters 6 and 7, we argue that it also helps determine expenditures in social insurance programs. Trends in the skills of immigrants relative to those of the native-born are important because they help us answer another critical question: How successful are immigrants in assimilating

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--> economically into the U.S. labor market? This issue is dealt with in the section on economic assimilation below. Are there intrinsic differences in relative productivity across immigrant cohorts? If so, why? Such cohort effects can arise from changes in immigration policy; one consequence of the major changes in policy embodied in the Immigration and Nationality Act Amendments of 1965, for example, may have been to deemphasize the role of skills in allocating entry visas. Later immigrants may thus have been less skilled relative to the native-born than those who came earlier. Cohort effects may also stem from changes in economic or political conditions in the source countries and in the United States. Even if the United States had not adopted the 1965 amendments, the improvements in economic conditions in Western Europe would have reduced the number of immigrants from these historical source countries. If skill levels vary across countries or if skills from different countries are not equally transferable to the United States, then the changing mix in national origins of the immigrant flow generates cohort effects. 7 To determine whether such cohort effects indeed exist, it is instructive to summarize the key trends in some measures of skills over the past three decades.8 Table 5.5 reports both the distribution of educational attainment as well as the percentage wage differential between immigrant and native workers over this period; it presents data on men and women separately. While comparing the skills and wages of immigrants with those of the native-born, it is important not to lose of sight of trends in the absolute skill levels of newly arriving immigrants. Table 5.5 shows, for example, that the education levels of new immigrant cohorts (men or women) have been rising over time. If education is a proxy for skill, the labor market skills that immigrants bring with them thus have been improving over time—but so have the skills of native-born Americans. The question, then, is whether the secular rate of improvement in immigrant skills has kept up with that of the native-born. Education may be the central credential an immigrant carries when he or she arrives in the United States. Many immigrants come with impressive schooling. In fact, a larger proportion of recent new immigrants have at least a bachelor's 7   Cohort effects are also observed when there is nonrandom return migration. If low-wage immigrant workers return to their source countries, the survivors from the earlier waves will tend to have relatively higher earnings than more recent waves. This issue is dealt with in the section on emigration below. 8   The statistics presented in this chapter are typically obtained from calculations that use the Public Use Samples of the U.S. decennial census. For the most part, native and immigrant wages are calculated in the subsample of civilian workers who are between the ages of 25 and 64, and who are not self-employed. It is common to restrict the analysis of wage data to salaried workers because the income of self-employed workers reflects both a return to the workers' human capital as well as a return to the physical capital invested in the firm. The census does not provide any information on these separate components of a worker's income.

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--> TABLE 5.5 Socioeconomic Characteristics of Immigrants and Natives in the United States, 1970-1990 Group/Variable 1970 1980 1990 MEN Natives Mean educational attainment (in years) 11.4 12.7 13.2 % less than high school diploma 40.2 22.7 14.4 % college graduate 15.0 22.9 26.3 All immigrants Mean educational attainment (in years) 10.7 11.6 11.6 % less than high school diploma 48.9 37.7 37.1 % college graduate 18.2 25.0 26.2 Percent wage differential between immigrants and natives -0.7 -9.5 -16.0 Recent immigrants (less than 5 years in U.S.) Mean educational attainment (in years) 11.1 11.7 11.8 % less than high school diploma 46.0 37.5 36.2 % college graduate 27.7 29.6 30.5 Percent wage differential between immigrants and natives -17.0 -27.4 -32.4 WOMEN Natives Mean educational attainment (in years) 11.1 12.1 12.8 % less than high school diploma 40.7 26.0 16.7 % college graduate 9.0 14.3 20.4 All immigrants Mean educational attainment (in years) 9.9 10.9 11.2 % less than high school diploma 52.1 39.4 37.4 % college graduate 7.9 14.6 19.3 Percent wage differential between immigrants and natives 1.8 -2.5 -5.3 Recent immigrants (less than 5 years in U.S.) Mean educational attainment (in years) 9.8 10.6 11.2 % less than high school diploma 52.8 42.2 37.4 % college graduate 13.0 19.3 24.1 Percent wage differential between immigrants and natives -11.5 -15.0 -22.0   Source: Tabulations from 1970, 1980, and 1990 Public Use Samples of U.S. Census of Population. Educational attainment for men and relative wages for both men and women are calculated in the sample of those aged 25-64 years who did not reside in group quarters, who were not self-employed, and who were employed in the civilian sector. Educational attainment for women is based on the sample of women aged 25-64 years who did not reside in group quarters. degree than is true of the U.S. population as a whole; 10 percent have advanced degrees, compared with 7 percent of the U.S. population. 9 At the same time, most recent immigrants have much lower levels of schooling than do other residents of the United States. More than 1 in 4 have only an eighth-grade education 9   This may be due in part to the existence of immigration admissions criteria that make it easier to gain entry if one has a bachelor's or an advanced degree.

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-->   Year Cohort/Age Group 1970 1980 1990 1975-1979 arrivals 25-34 in 1980 — -22.1 -10.0 35-44 in 1980 — -25.5 -18.5 45-54 in 1980 — -31.7 -21.0 1980-1984 arrivals 25-34 in 1990 — — -13.3 35-44 in 1990 — — -22.2 45-54 in 1990 — — -30.5 1985-1989 arrivals 25-34 in 1990 — — -21.5 35-44 in 1990 — — -28.3 45-54 in 1990 — — -34.7 Some College 1960-1964 arrivals 15-24 in 1970 — 3.1 5.8 25-34 in 1970 2.0 0.8 1.8 35-44 in 1970 -2.1 -8.0 0.1 45-54 in 1970 -14.7 -13.1 — 1965-1969 arrivals 15-24 in 1970 — 0.1 -1.9 25-34 in 1970 -15.7 -9.4 -5.6 35-44 in 1970 -3.4 -11.5 -7.3 45-54 in 1970 -12.7 -20.9 — 1970-1974 arrivals 25-34 in 1980 — -6.8 -3.5 35-44 in 1980 — -18.2 -11.7 45-54 in 1980 — -18.7 -16.9 1975-1979 arrivals 25-34 in 1980 — -18.4 -9.0 35-44 in 1980 — -22.3 -20.0 45-54 in 1980 — -30.5 -16.2 1980-1984 arrivals 25-34 in 1990 — — -13.8 35-44 in 1990 — — -21.3 45-54 in 1990 — — -30.9

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-->   Year Cohort/Age Group 1970 1980 1990 1985-1989 arrivals 25-34 in 1990 — — -23.1 35-44 in 1990 — — -24.8 45-54 in 1990 — — -32.5 College graduates (including those with graduate degrees) 1960-1964 arrivals 15-24 in 1970 — 5.7 8.0 25-34 in 1970 -0.1 2.1 8.6 35-44 in 1970 -11.8 -3.6 10.9 45-54 in 1970 -27.3 -12.7 — 1965-1969 arrivals 15-24 in 1970 — 7.5 5.3 25-34 in 1970 -16.8 -1.4 5.5 35-44 in 1970 -22.8 -9.4 -1.9 45-54 in 1970 -28.7 -19.8 — 1970-1974 arrivals 25-34 in 1980 — 1.9 4.7 35-44 in 1980 — -14.2 -6.4 45-54 in 1980 — -24.6 -14.1 1975-1979 arrivals 25-34 in 1980 — -10.8 -4.3 35-44 in 1980 — -20.1 -14.7 45-54 in 1980 — -20.3 -27.2 1980-1984 arrivals 25-34 in 1990 — — -10.5 35-44 in 1990 — — -17.5 45-54 in 1990 — — -26.2 1985-1989 arrivals 25-34 in 1990 — — -17.9 35-44 in 1990 — — -20.9 45-54 in 1990 — — -27.5 —= the cohort is outside the 25-64 age range. Source: Tabulations from the 1970, 1980, and 1990 Public Use Samples of the U.S. Census of Population. The statistics are calculated in the subsample of men aged 25-64 years who work in the civilian sector, who are not self-employed, and who do not reside in group quarters.

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--> TABLE 5.A2 Observed Wage Growth of Specific Cohorts of Immigrant Women, by Education Level (Percentage Wage Differential Between Immigrants and Natives, by Age Group and Year of Arrival)   Year Cohort/Age Group 1970 1980 1990 0-8 years of school 1960-1964 arrivals 15-24 in 1970 — 2.6 16.0 25-34 in 1970 17.2 14.4 14.6 35-44 in 1970 21.4 5.7 14.4 45-54 in 1970 13.7 7.9 — 1965-1969 arrivals 15-24 in 1970 — 8.5 11.3 25-34 in 1970 2.2 9.5 14.9 35-44 in 1970 2.9 3.6 7.0 45-54 in 1970 2.0 -0.0 — 1970-1974 arrivals 25-34 in 1980 — 2.5 9.2 35-44 in 1980 — 2.2 7.7 45-54 in 1980 — 0.7 4.4 1975-1979 arrivals 25-34 in 1980 — -6.6 0.8 35-44 in 1980 — -4.8 -2.3 45-54 in 1980 — -8.6 2.8 1980-1984 arrivals 25-34 in 1990 — — -3.0 35-44 in 1990 — — -5.7 45-54 in 1990 — — -5.5 1985-1989 arrivals 25-34 in 1990 — — -12.2 35-44 in 1990 — — -13.1 45-54 in 1990 — — -9.8 9-11 years of school 1960-1964 arrivals 15-24 in 1970 — 11.8 11.6 25-34 in 1970 13.2 6.3 18.2 35-44 in 1970 12.0 8.0 9.2 45-54 in 1970 10.0 3.5 —

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-->   Year Cohort/Age Group 1970 1980 1990 1965-1969 arrivals 15-24 in 1970 — 8.6 17.1 25-34 in 1970 10.1 12.2 10.8 35-44 in 1970 -5.8 9.3 10.3 45-54 in 1970 -4.8 -1.4 — 1970-1974 arrivals 25-34 in 1980 — 6.1 10.2 35-44 in 1980 — 2.6 0.6 45-54 in 1980 — -1.3 -2.1 1975-1979 arrivals 25-34 in 1980 — -3.9 4.7 35-44 in 1980 — -11.0 1.4 45-54 in 1980 — -8.7 -0.4 1980-1984 arrivals 25-34 in 1990 — — 1.5 35-44 in 1990 — — -0.8 45-54 in 1990 — — -8.2 1985-1989 arrivals 25-34 in 1990 — — -7.0 35-44 in 1990 — — -10.9 45-54 in 1990 — — -15.0 High school graduates 1960-1964 arrivals 15-24 in 1970 — 8.4 14.9 25-34 in 1970 8.1 0.9 3.5 35-44 in 1970 -2.0 -1.4 2.2 45-54 in 1970 -8.5 -7.9 — 1965-1969 arrivals 15-24 in 1970 — 5.1 11.7 25-34 in 1970 -0.7 3.4 2.3 35-44 in 1970 -5.9 -1.3 1.9 45-54 in 1970 -22.7 -8.3 — 1970-1974 arrivals 25-34 in 1980 — -2.4 5.2 35-44 in 1980 — -2.6 4.2 45-54 in 1980 — -8.1 -1.0

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-->   Year Cohort/Age Group 1970 1980 1990 1975-1979 arrivals 25-34 in 1980 — -9.3 3.4 35-44 in 1980 — -3.6 -2.2 45-54 in 1980 — -13.7 -7.0 1980-1984 arrivals 25-34 in 1990 — — -4.0 35-44 in 1990 — — -3.7 45-54 in 1990 — — -9.8 1985-1989 arrivals 25-34 in 1990 — — -8.8 35-44 in 1990 — — -15.7 45-54 in 1990 — — -22.8 Some college 1960-1964 arrivals 15-24 in 1970 — 5.7 12.7 25-34 in 1970 11.1 4.9 9.2 35-44 in 1970 -1.1 1.2 4.1 45-54 in 1970 8.0 1.2 — 1965-1969 arrivals 15-24 in 1970 — 8.5 8.6 25-34 in 1970 -8.2 8.6 8.4 35-44 in 1970 -9.8 1.5 6.9 45-54 in 1970 -15.0 -4.0 — 1970-1974 arrivals 25-34 in 1980 — 1.3 6.2 35-44 in 1980 — -2.4 5.0 45-54 in 1980 — -5.7 3.8 1975-1979 arrivals 25-34 in 1980 — -7.0 3.6 35-44 in 1980 — -8.2 -1.3 45-54 in 1980 — -18.5 1.7 1980-1984 arrivals 25-34 in 1990 — — -2.3 35-44 in 1990 — — -7.5 45-54 in 1990 — — -15.5

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-->   Year Cohort/Age Group 1970 1980 1990 1985-1989 arrivals 25-34 in 1990 — — -12.7 35-44 in 1990 — — -18.8 45-54 in 1990 — — -23.5 College graduates (including those with graduate degrees) 1960-1964 arrivals 15-24 in 1970 — 7.3 13.6 25-34 in 1970 -14.4 0.6 4.4 35-44 in 1970 -20.5 -8.2 0.1 45-54 in 1970 -36.2 -21.7 — 1965-1969 arrivals 15-24 in 1970 — 9.5 8.9 25-34 in 1970 -24.9 2.0 3.2 35-44 in 1970 -20.6 -12.2 2.6 45-54 in 1970 -39.5 -13.8 — 1970-1974 arrivals 25-34 in 1980 — 1.7 7.6 35-44 in 1980 — -5.6 0.6 45-54 in 1980 — -20.0 -9.8 1975-1979 arrivals 25-34 in 1980 — -17.0 -2.1 35-44 in 1980 — -24.7 -15.2 45-54 in 1980 — -36.3 -25.6 1980-1984 arrivals 25-34 in 1990 — — -3.0 35-44 in 1990 — — -17.2 45-54 in 1990 — — -24.2 1985-1989 arrivals 25-34 in 1990 — — -17.8 35-44 in 1990 — — -26.2 45-54 in 1990 — — -35.4 —= the cohort is outside the 25-64 age range. Source: Tabulations from the 1970, 1980, and 1990 Public Use Samples of the U.S. Census of Population. The statistics are calculated in the subsample of women aged 25-64 years who work in the civilian sector, who are not self-employed, and who do not reside in group quarters.

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--> TABLE 5.A3 Observed Wage Growth of Specific Cohorts of Immigrant Women from Mexico and from Countries Other Than Mexico   Year Cohort/Age Group 1970 1980 1990 Immigrants from Mexico 1960-64 arrivals —     15-24 in 1970 — -9.0 -16.6 25-34 in 1970 -25.2 -20.0 -26.2 35-44 in 1970 -12.9 -21.6 -25.8 45-54 in 1970 -21.6 -21.2 — 1965-69 arrivals 15-24 in 1970 — -17.7 -25.6 25-34 in 1970 -31.0 -21.0 -29.4 35-44 in 1970 -36.1 -23.6 -28.3 45-54 in 1970 -33.5 -28.1 — 1970-74 arrivals 25-34 in 1980 — -26.0 -31.7 35-44 in 1980 — -26.6 -34.3 45-54 in 1980 — -30.8 -35.5 1975-79 arrivals 15-24 in 1980 — -33.3 -37.1 25-34 in 1980 — -32.4 -40.9 35-44 in 1980 — -34.9 -37.7 1980-84 arrivals 25-34 in 1990 — — -36.6 35-44 in 1990 — — -42.3 45-54 in 1990 — — -44.2 1985-90 arrivals 25-34 in 1990 — — -40.9 35-44 in 1990 — — -42.8 45-54 in 1990 — — -46.9 Immigrants from Countries Other Than Mexico 1960-64 arrivals 15-24 in 1970 — 7.3 16.0 25-34 in 1970 5.2 4.5 7.4 35-44 in 1970 0.7 0.2 5.1 45-54 in 1970 -4.0 -3.1 —

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-->   Year Cohort/Age Group 1970 1980 1990 1965-69 arrivals 15-24 in 1970 — 5.2 6.5 25-34 in 1970 -5.1 8.5 8.1 35-44 in 1970 -9.1 -3.4 0.3 45-54 in 1970 -18.0 -8.7 — 1970-74 arrivals 25-34 in 1980 — 0.8 6.3 35-44 in 1980 — -0.1 4.1 45-54 in 1980 — -10.3 -6.9 1975-79 arrivals 15-24 in 1980 — -10.5 1.8 25-34 in 1980 — -11.6 -6.2 35-44 in 1980 — -20.9 -9.6 1980-84 arrivals 25-34 in 1990 — — -3.9 35-44 in 1990 — — -12.3 45-54 in 1990 — — -18.5 1985-90 arrivals 25-34 in 1990 — — -11.9 35-44 in 1990 — — -22.6 45-54 in 1990 — — -26.8 —= the cohort is outside the 25-64 age range. Source: Tabulations from the 1970, 1980, and 1990 Public Use Samples of the U.S. Census of Population. The statistics are calculated in the subsample of men aged 25-64 years who work in the civilian sector, who are not self-employed, and who do not reside in group quarters.

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--> Appendix 5.B Calculation of Shares of Expenditures Attributable to Immigrant Labor This appendix outlines the procedures implemented to calculate labor and immigrant labor shares for all commodities available in the 1987 benchmark input-output tables of the Bureau of Economic Analysis (BEA), explaining how these shares are transformed into labor shares by broad expenditure categories. The Calculation of Commodity Labor Shares To be able to relate industries of employment to consumer products, the 1987 benchmark input-output (I-O) accounts are used. The BEA constructs these tables from census data once every five-years (the 1992 tables are not available until 1997). The I-0 tables accounts use two classification systems, one for industries and another for commodities, both using the same I-O numbers. This distinction between commodities and industries is necessary since industries may produce more than one commodity, and commodities in turn may be produced by more than one industry. For example, the commodity 14.0600, fluid milk, gets produced by industries 14.0600 (80.4 percent), 1.0100 (dairy farm products, 13.2 percent), and several other industries with relatively small shares. In turn, industry 14.0600 produces other commodities as well, such as creamery butter, cheese, and so on. The 6 digit I-O accounts thus summarize information for 519 commodities and industries. The I-O tables are used to determine how much of a commodity gets produced domestically, by which industries it gets produced, and how much labor these industries use. Although not all commodities are consumed by households, they are still used as intermediate inputs in production of other commodities. To relate a dollar of consumption expenditure to the share of immigrant labor, several steps are undertaken. Industries produce commodities using inputs such as labor and capital in combination with intermediate inputs, which may have been produced by other industries. The ''make" table from the I-O accounts shows the dollar value in producer prices of each commodity produced by each industry. From this table, industry shares in producing commodities are determined as follows, j = S i (1) where j and i are vectors of ones representing commodities and industries, respectively. The S matrix is of dimension j by i, its elements representing industry commodity shares, with its rows adding up to one. The "use" table shows the dollar value, in producer prices, of each commodity used by each industry. It also contains information on an industry's value added. From the use table, a technology matrix is constructed as follows,

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--> (2) where the elements of T represent the commodity shares in a dollar of industry production and V being the industry's value added. The compensation of employees part of the value added, l, is used to determine an industry's labor share. Let o represent other value added, and we can rewrite equation 2 as, (2a) Substituting 2a in equation 1 we get, (3) (3a) The term Wl represents the dollar share of labor in the producer price of a commodity. To obtain the commodity labor share in terms of purchaser, we need to add the labor that is involved in transportation, wholesale trade, and retail trade. Since part of the domestic supply of commodities is imported, the domestic labor share of a dollar's worth of consumption expenditure is given by the commodity labor share in terms of purchaser prices times the domestic share of commodity production. Let lj denote the share of labor in a dollar's worth of consumption expenditure. The commodity labor shares are then calculated as, (4) where m is the margin (transportation and trade) part of the purchaser price and lm the share of labor involved in the trade and transportation margin. Shares attributable to labor are calculated in this way for every commodity. Industries from the I-O tables are matched up with 1990 census industries to obtain immigrant industry labor shares. Immigrants are simply defined as foreign-born, not to American citizens, between the ages of 18 and 64 years, not living in group quarters. The immigrant labor share is defined as the share of total wages that flows to immigrants within every industry.

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--> Expenditure Categories In order to relate the commodity labor shares to consumption expenditure data, commodities are mapped into 48 separate categories. A labor share is then calculated for every expenditure category. Commodities are weighted by the amount of personal consumption expenditures (PCE) to determine labor shares by expenditure category. Expenditures on housing are largely allocated to the construction industry. The definition of expenditure categories depends on how easy it is to map an expenditure category to a commodity in the I-O tables. On one hand, for example, expenditures on laundry, cleaning, and garment services can be directly linked to one I-O commodity. On the other hand, expenditures on food inside the home are linked to 50 commodities, most of which fall under "food and kindred products." Expenditure categories range from food (inside the home, outside the home), household services, financial and legal services, household goods (appliances, furniture), utilities, housing (rent, maintenance), apparel, education, transportation (cars, public), and recreation (equipment, fees).