Immigrant Entry Earnings and Human Capital Growth : Evidence from the 1960-1990 Censuses

Recent immigrants to the United States are starting their economic lives at substantially lower earnings than previous cohorts of immigrants, even after adjusting for inter-cohort differences in education. The decline in education adjusted earnings--attributed to high family admissions and changes in the country-of-origin composition of U.S. immigrants--has fostered concerns about the "quality" of recent immigrants and motivated changes in U.S. immigration law as well as calls for further change. The importance of these concerns depends upon whether immigrants starting with low earnings remain at a disadvantage throughout their working lives. This paper summarizes our research concerning the relationship between immigrant entry earnings and earnings growth and the effect on immigrant earnings growth of kinship admission and country of origin. Using 1960-1990 decennial census data, we find that for cohorts from the same country of origin, education group, and age group, there is a systematic inverse relationship between initial earnings and subsequent earnings growth. With regard to the effect of greater admissions on the basis of kinship, we find that declines in admissions on the basis of occupational skills and corresponding increases in admissions on the basis of family are associated with both a decrease in initial earnings and an increase in earnings growth. Finally, we find that the earnings of demographically comparable immigrants, regardless of country of origin, converge with time in the United States. All of these findings suggest that immigrant entry earnings and earnings growth are jointly determined and inversely related