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Immigrant Wage and Employment Assimilation: A Comparison of Methods

Author

Listed:
  • Deborah Cobb-Clark

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA))

  • Barbara Hanel

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Duncan McVicar

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

We compare alternative methods for estimating immigrant wage and employment assimilation using unique panel data over 2001 - 2009 for a large, nationally-representative sample of immigrants. Previous assimilation estimates have been mainly based on crosssectional data and have therefore suffered from a range of potential biases. We find that a fixed-effects model generates estimated employment assimilation profiles that are flatter and significantly different to those produced by cross-sectional and synthetic cohort methods. However, there are no significant differences in the wage assimilation profiles across alternative methods.

Suggested Citation

  • Deborah Cobb-Clark & Barbara Hanel & Duncan McVicar, 2012. "Immigrant Wage and Employment Assimilation: A Comparison of Methods," Melbourne Institute Working Paper Series wp2012n28, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2012n28
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    References listed on IDEAS

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    1. George J. Borjas, 2021. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 2, pages 3-29, World Scientific Publishing Co. Pte. Ltd..
    2. Darren Lubotsky, 2011. "The Effect of Changes in the U.S. Wage Structure on Recent Immigrants' Earnings," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 59-71, February.
    3. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760, Elsevier.
    4. Darren Lubotsky, 2007. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 820-867, October.
    5. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    6. Harriet Duleep & Daniel Dowhan, 2002. "Insights from longitudinal data on the earnings growth of U.S. foreign-born men," Demography, Springer;Population Association of America (PAA), vol. 39(3), pages 485-506, August.
    7. Fertig, Michael & Schurer, Stefanie, 2007. "Labour Market Outcomes of Immigrants in Germany – The Importance of Heterogeneity and Attrition Bias," Ruhr Economic Papers 20, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. Barry R. Chiswick & Anh T. Le & Paul W. Miller, 2008. "How Immigrants Fare across the Earnings Distribution in Australia and the United States," ILR Review, Cornell University, ILR School, vol. 61(3), pages 353-373, April.
    9. Michael Beenstock & Barry Chiswick & Ari Paltiel, 2010. "Testing the immigrant assimilation hypothesis with longitudinal data," Review of Economics of the Household, Springer, vol. 8(1), pages 7-27, March.
    10. repec:zbw:rwirep:0020 is not listed on IDEAS
    11. Wei-Yin Hu, 2000. "Immigrant Earnings Assimilation: Estimates from Longitudinal Data," American Economic Review, American Economic Association, vol. 90(2), pages 368-372, May.
    12. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
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    Citations

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    Cited by:

    1. Christian Dustmann, 2014. "Selective Outmigration and the Estimation of Immigrants Earnings Profiles," RF Berlin - CReAM Discussion Paper Series 1402, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    2. Yu, Yip-Ching & Nimeh, Zina, 2020. "Segmented paths of welfare assimilation," MERIT Working Papers 2020-036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Nguyen, Ha Trong & Duncan, Alan S, 2017. "Exchange rate fluctuations and immigrants' labour market outcomes: New evidence from Australian household panel data," Journal of International Economics, Elsevier, vol. 105(C), pages 174-186.
    4. Rus’an Nasrudin & Budy P. Resosudarmo, 2019. "Assimilation of rural-urban migrants under a less restrictive internal migration policy: Evidence from Indonesia," Departmental Working Papers 2019-04, The Australian National University, Arndt-Corden Department of Economics.
    5. Robert Breunig & Syed Hasan & Mosfequs Salehin, 2013. "The Immigrant Wage Gap and Assimilation in Australia: Does Unobserved Heterogeneity Matter?," The Economic Record, The Economic Society of Australia, vol. 89(287), pages 490-507, December.
    6. To, Hang & Grafton, R. Quentin & Regan, Sue, 2017. "Immigration and labour market outcomes in Australia: Findings from HILDA 2001–2014," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 1-13.
    7. Rus'an Nasrudin & Budy P. Resosudarmo, 2023. "Mental health assimilation of rural–urban migrants in developing countries: Evidence from Indonesia's four cities," Papers in Regional Science, Wiley Blackwell, vol. 102(4), pages 761-790, August.

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    More about this item

    Keywords

    Immigration; immigrant assimilation; employment; wages; Australia;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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