The Slowdown in Immigrant Assimilation

The second paper of mine that got published in the past few weeks deals with trends in the economic assimilation of immigrants–the rate at which their earnings catch up with those of native workers. The initial draft of this paper was written quite a while ago, but it was presented at a conference and it took years for that issue of the journal to come out.

My initial interest in immigration research decades ago was sparked by the question: What does it mean to say that immigrants who arrived in the country a long time ago do better than immigrants who have just arrived? The conventional interpretation was that this difference in economic outcomes represented assimilation.

I thought that perhaps something else might be at work. This idea led to my 1985 Journal of Labor Economics paper that examined how cross-section measures of assimilation were contaminated by cohort differences in wage levels. In other words, the average immigrant in some immigrant waves was more productive than the average immigrant in other waves, even at the time of arrival. The wage difference between new and old immigrants might say little about assimilation, but might instead represent a difference in productivity between the two waves.

My new paper returns to this question and documents that there are also cohort differences in the rate of wage growth. The earnings of some waves grow faster than the earnings of other waves. How important are these differences?

Immigrant Assimilation

The graph shows the rate at which the average earnings of a particular immigrant cohort are catching up to that of comparably aged native workers. The immigrants who arrived before 1980 experienced solid wage growth; the immigrants who arrived after 1980 experienced far less growth. In short, there has been a slowdown in the economic assimilation of immigrants. The paper shows that this slowdown is partly linked to differences in human capital acquisition: the rate at which immigrants become fluent in the English language has also slowed down, as shown in the following graph:

English Assimilation

The finding of an assimilation slowdown is also confirmed by looking at distinct tasks used in different occupations. Hugh Cassidy’s recent working paper concludes that:

This paper investigates the occupational attainment of natives and immigrants in the United States, where occupations are characterized by a vector of task usages (analytical, interactive, and manual) that describe the activities performed on the job…While earlier immigrant cohorts show some degree of task usage assimilation, newer cohorts have experienced a significant slowdown in their occupational assimilation rates. These results support findings of slower earnings assimilation of recent cohorts.

My paper tries to figure out the source of the slowdown, but is not completely successful. The best I can do is show that it is related to the rapid growth of ethnic enclaves. Those immigrant groups that are larger and more geographically clustered have lower assimilation rates, and the growth of these groups accounts for about a third of the slowdown. But we still don’t know what caused the other two-thirds.

Author: George Borjas

I am a Professor of Economics and Social Policy at the Harvard Kennedy School.