IZA DP No. 802: Assimilation via Prices or Quantities? Labor Market Institutions and Immigrant Earnings Growth in Australia, Canada, and the United States
published in: Journal of Human Resources, 2006, 41 (4), 821-840
How do international differences in labor market institutions affect the nature of immigrant
earnings assimilation? Using 1980/81 and 1990/91 cross-sections of census data from
Australia, Canada, and the United States, we estimate the separate effects of arrival cohort
and duration of destination-country residence on immigrant outcomes in each country.
Relatively inflexible wages and generous unemployment insurance in Australia suggest that
immigrants there might improve themselves primarily through employment gains rather than
wage growth, and we find empirically that employment gains explain all of the labor market
progress experienced by Australian immigrants. Wages are less rigid in Canada and the
United States than in Australia, with the general consensus that the U.S. labor market is the
most flexible of the three. We find that wage assimilation is an important source of immigrant
earnings growth in both Canada and the United States, but the magnitude of wage
assimilation is substantially larger in the United States. These same general patterns remain
when we replicate our analyses for two subsamples of immigrants – Europeans and Asians –
that are more homogeneous in national origins yet still provide sufficiently large sample sizes
for each country.
We use cookies to provide you with an optimal website experience. This includes cookies that are necessary for the operation of the site as well as cookies that are only used for anonymous statistical purposes, for comfort settings or to display personalized content. You can decide for yourself which categories you want to allow. Please note that based on your settings, you may not be able to use all of the site's functions.
Cookie settings
These necessary cookies are required to activate the core functionality of the website. An opt-out from these technologies is not available.
In order to further improve our offer and our website, we collect anonymous data for statistics and analyses. With the help of these cookies we can, for example, determine the number of visitors and the effect of certain pages on our website and optimize our content.