Immigrants and Ethnic Differences

G borjas 1985 to identify the immigrant entry

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Unformatted text preview: om a few Censuses), the standard approach (e.g. Borjas, 1985) to identify the immigrant entry earnings and assimilation effects thus include, at a minimum ,the following terms: ln W =β0+ β1 * EXP + β2 EXP2 + β3 School + β4 X + I * (δ0 + Σj δCj + α YSM + δ1*X) + u where W is the weekly wage; EXP is years of labour market experience; S is years of schooling; I is an immigrant dummy; Cj are cohort dummies identifying the period of arrival; YSM is years since migration; X is a vector of individual characteristics, which may include country of origin, language skills, network variables, etc.; and u is an iid error term. In Canada, the relative earnings of immigrants have been falling since the 1970s o Among males, the log earnings ratio at entry declined from 0.83 among the late 1970s cohort to 0.55 among the early 1990s cohort o For the early 1990s cohort, it was only 0.7 of Canadians after 6 to 10 years in Canada Fortin – Econ 560 Lecture 4B Although the relative share of economic immigrant class has grown, the source countries have changed dramatically in the last 30 years o In 2002, almost one in two (46 percent) first generation immigrants aged 15 and over reported non-European origins o In contrast, among individuals aged 15 and over whose parents were Canadian-born, so-called third generation, an overwhelming majority were of European origin. Of the permanent residents admitted to Canada over the last decade, about half were from the Asia-Pacific regions and one in five came from Africa and the Middle East. This demographic shift in first-generation Canadians will transform the racial and ethnic composition of second and successive generations of the Canadian population. o These changes can also have some important consequences for the outcomes of the immigrants’ offspring , “1.5” and 2nd generation immigrants Fortin – Econ 560 Lecture 4B Much has been written about the barriers, immigrants face in adapting to their country of settlement, o devaluation of credentials and experience acquired in their home country, o a lack of proficiency in the official language(s) of the host country, o cultural differences, and a lack of social networks. Green and Worswick (2002), Aydemir and Skuterud (2004, 2005) and Frenette and Morissette (2003) concluded that during the 1980s and 1990s the declining returns to experience was one of the major factors, if not the most important, associated with the decline in earnings among recent immigrants. Aydemir and Skuterud who used the complete 20%microdata files of the 1981, 1986, 1991, 1996, and 2001 Canadian Censuses concluded that, among recent immigrants, o The decline in the return to foreign experience accounted for roughly one third of the decline in entry level earnings reported earlier. o Another third of the decline is explained by compositional shifts in language ability and region of birth. Source: Aydemir and Sweetman (2007) Table 11 A - Earnings differences across generations and visible minorities, Males US Canada...
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