Association for Public Policy Analysis & Management

Recent cross-sectional comparisons point to immigrants’ lower socioeconomic positions. These studies generally conclude that, notwithstanding the small portion of highly successful immigrants, many immigrants have lower educational attainment and income (Fuligni & Yoshikawa 2014) and higher rates of poverty compared to natives (Quandt et al. 2006; Van Hook & Balistreri 2006). It has also been argued that immigrants of more recent arrivals are even more disadvantaged in socioeconomic status than earlier arrivals (Borjas 1999; Camarota 2001). While the foreign born may have lower earnings, on average, than U.S. natives (due to lower educational attainment, for example), recent flows of immigrants have been distributed more toward the extremes than the natives population. As the U.S. labor market is becoming more polarized and as an increasing number of immigrant laborers are entering the labor force (Dwyer 2013), issues surrounding their economic assimilation become particularly pertinent to discussions of immigration policy. 

Given the strong connection between initial earning upon labor market entry and later life earning trajectories, it is crucial to gain understanding on the earning trajectories of immigrants at the stage of transition to adulthood and within the first few years in the labor market. In addition, it is important to sort out the role that composition and labor market structural changes play in these comparisons. Supplementing prior cross-sectional studies with longitudinal and multiple-cohort analyses will provide a dynamic portrait of earning trajectories within and across generations.

In this study, we use two nationally representative cohorts—the National Longitudinal Study of Youth (NLSY79) and the National Longitudinal Study of Adolescent to Adult Health (Add Health) —to examine the effects of generation and duration of residence on their earnings in the first few years upon their entrance of labor market. We exploit the cohort design of these two data source to investigate the role of compositional changes (at micro-level) and structural changes (at the macro-level) play in affecting the economic achievement of immigrant youth and young adults, the second generation immigrants, and their native peers. Our approach to immigrants’ economic attainment is guided by contemporary discussions of policies on immigration and immigrants in the United States. Our goal is to provide a greater understanding of how immigrant and second-generation youths progress through the initial stages of the labor market experience.