User’s Guide to the NAS Report, 1: Assimilation

It is well known that immigrants have an economic disadvantage when they first enter the United States. Many are not fluent in English; they are not familiar with how the US labor market works; and on and on. So it is not surprising that, at first, they earn far less than natives. Over time, the immigrants learn the language, acquire new skills, and begin to “catch up” or assimilate to the native norm.

Economic assimilation is obviously an important component of any assessment of the impact of immigration. And despite all the hype claiming that immigrants today are assimilating just as well as earlier waves did (including another NAS report focusing specifically on assimilation and released just one year ago; here’s that report and the media spin), the new NAS report gives a far more realistic and measured assessment of the situation.

Chapter 3, which summarizes trends in the skills of immigrants, is quite detailed. But there is one table (Table 3-12) and one figure (Figure 3-6) that speak volumes about what really matters. Here’s the table:

nas-table-3-12

This table reports the age-adjusted percent wage gap between specific immigrant waves and natives at different points in time. The table obviously shows that there was a lot of wage growth for immigrants who arrived in the 1960s and 1970s, but far less for immigrants who arrived in the 1980s and 1990s. For example, the 1965-1969 arrivals had a 23.5% wage disadvantage at the time of arrival, and this had narrowed to a 12.0% disadvantage after 10 years. But the 1995-99 arrivals had a 27.3% wage disadvantage at the time of arrival, and it was still 26.9% after 10 years. As the report modestly puts it:

Male immigrants who arrived between 1965 and 1969 experienced rapid growth in their relative wages, which allowed them to close the gap with native-born peers. This indication of economic integration has shown signs of slowing in more recent decades. The relative wage profile has flattened somewhat across recent arrival cohorts, indicating a slowing rate of wage convergence.

And then here’s the figure:

nas-figure-3-6

It shows that immigrants who came in the 1970s became fluent in English at a faster rate than the immigrants who arrived in the 1980s and 1990s. This is how the panel describes the finding:

These trends generally corroborate the finding…that earlier cohorts of immigrants experienced more rapid language assimilation than recent cohorts.

The NAS analysis of trends in immigrant skills brings to the immigration debate a new and important fact: There has been a slowdown in the economic assimilation of immigrants. Even though we do not yet fully understand why this slowdown occurred, there is a crucial question lurking underneath: What does the assimilation slowdown mean for the future?

An aside: Beware of adjectives and adverbs in the NAS report. Look at Table 3-12 and Figure 3-6, and ask yourself: Is the assimilation slowdown numerically important? This is how the report’s summary describes it: “The rate of relative wage growth and English language acquisition among the foreign-born is now slightly slower than it was for earlier immigrant waves.” Maybe it’s just me, but the finding that there is no wage growth whatsoever by the time you get to the 1995-1999 wave is a tad stronger than the claim that assimilation is “now slightly slower.”

Author: George Borjas

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

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