Association for Public Policy Analysis & Management

Intergenerational mobility elasticities have been calculated for different demographic groups within the United States. Research decomposing these elasticities among different factors, however, has room for expansion (see Solon, 1999). In the case of the intergenerational mobility of immigrant groups, this decomposition is even more important, as it can inform policies on immigration. Similarly, recent national security developments, where individuals join adversarial groups to the country in which they settle, emphasize the importance of understanding the immigrant assimilation process and intergenerational mobility.

While different cohorts of immigrants are found to have different outcomes in assimilating within the labor market (Borjas, 1999), what is not clear is whether the networks upon the time of settlement have a significant impact on future generations. Exploring the impact of networks on intergenerational mobility would require the ability to trace migrants from their respective nations, the respective networks into which they settle, that generations outcome, and the outcomes of the following generations. Data that incorporates these factors, however, is difficult to find.

This paper expands upon the immigration and intergenerational mobility literature by exploring the questions of: (1) how networks upon settlement affect lifetime income of first generation immigrants and, (2) whether these differentials due to network influence the future generations’ labor market and human capital outcomes as adults.

Borjas (1992) develops a model that shows how ethnic capital at the time of settlement affects immigrant children. Ethnic capital is defined as the average quality of the ethnic environment in which parents invest in the children’s human capital. Borjas (1992) defines ethnic capital as the average human capital of the ethnic group upon the time of settlement. Borjas (1992) finds that ethnic capital is a determinant of human capital outcomes for future generations.

In order to properly motivate my empirical framework, I modify the Borjas (1992) model to incorporate endogenous income that is due to heterogeneous settlement. The basic idea is that human capital opportunities are different based on the networks into which immigrants settle. In order to explore this question, I use the New Immigrant Survey (NIS) and the Current Population Survey (CPS) to explore this question and push the literature to understanding the impacts of networks upon settlement on future generation outcomes.

References

Borjas, George, 1992. “Ethnic Capital and Intergenerational Mobility.” The Quarterly Journal of Economic, 107(1):123-150

Borjas, George, 1999. “The Economic Analysis of Immigration.” Handbook of Labor Economics, 3 (Part A), Eds. Orley Ashenfelter and David Card, 1697-1760, Elsevier. 

Solon, Gary, 1999. “Intergenerational Mobility in the Labor Market.”  Handbook of Labor Economics, 3(Part A), Eds. Orley Ashenfelter and David Card, 1761-1800, Elsevier.