Differences in Category of Immigrant on Economic Assimilation Rates

Jacob Diehn

Economics

Jie Ma

Since the early 1970s, the rate of immigration into the United States has been rapidly increasing. Many of the immigrants entering the U.S. are attempting to escape violence, poverty and other hardships. Those who are highly skilled and educated are searching for growth opportunities within their careers, but one commonality among all immigrants is the desire to increase their earning potential. The earnings of immigrants in the U.S., particularly low-skilled immigrants, tend to be initially much lower than their native counterparts, and it can take up to 15 years to reach the level of a native worker (Friedberg, 1992). The rate at which immigrant wages reach that of natives is called the assimilation rate. This paper will examine how assimilation rate varies among different categories of immigrants: (1) foreign-born immigrants who, before immigration, were non-citizens, (2) immigrants from U.S. territories who, excluding American Samoa, were citizens prior to immigration, and (3) foreign-born immigrants born to American parents who were citizens at birth. This paper uses cross-sectional data from the American Community Survey (ACS) to estimate differentiations in immigrant assimilation rate within each of the three categories. The paper finds that immigrants without U.S. parents outside of the U.S. territories earn more initially and assimilate faster than immigrants from the U.S. parent and U.S. territory categories. These differences can be attributed to the difference in selection between the three categories; Immigrants from the Immigrant category are positively selected while U.S. territory and U.S. parent immigrants are negatively selected.

Jan-9-2024