Immigrant Earnings Patterns In High Immigration States

Abstract

This paper examines and measures the extent of wage convergence of immigrants to native-born workers.  The focus is on a dimension of immigrant labor market assimilation that has been largely overlooked in this literature; particularly, how differences in local labor market wage-setting mechanisms affect the process of wage convergence.  Recently, some have argued that immigrants arriving after the 1970s will possess inferior assimilation abilities relative to previous immigrant cohorts because they lack essential skills.  This paper shows that wage convergence varies significantly between high-immigration states and that the wage-setting structure can be a significant factor in the assimilation process.  The results also indicate that recent immigrants begin their process of assimilation from a position that is similar to previous immigrants and that if their human capital accumulation rates mirror those of previous cohorts, successful wage convergence will rest on the development of an equitable pay structure.