On the Wage Growth of Immigrants: Israel, 1990-2000

By Zwi Eckstein, Yoram Weiss. Social Science Research Network, 2003

168 citations recorded by the source corpus.

This paper develops a descriptive methodology for the analysis of wage growth of immigrants, based on human capital theory. The sources of the wage growth are: (i) the rise of the return to imported human capital; (ii) the impact of accumulated experience in the host country; and, (iii) the mobility up the occupational ladder in the host country. Using human capital theory, we derive a non-linear model that imposes restrictions across the earning equations of natives and immigrants. The two earning functions are estimated jointly, using repeated cross section data. Using data on immigrants from the former Soviet Union to Israel, we find: Upon arrival, immigrants receive no return for imported skills. In the ten years following arrival, wages of highly skilled immigrants grow at 8% a year. Rising prices of skills, occupational transitions, accumulated experience in Israel and economy-wide rise in wages account for 3.4, 1.1, 1.5 and 1.4 percent each. In the long run, the return for schooling converges to .028, substantially below the .069 for natives. We do not reject the hypothesis that the return for experience converges to that of natives, and immigrants receive higher return for their unmeasured skills. We find that there is some downgrading in occupational distribution of immigrants relative to that of natives. Moreover, the average wages of immigrants approach but do not converge to the wages of comparable natives. The main reason for that is the low return to their imported skills.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/62909db78eac80d66ba7741dbbebfa2bee37a08e

Citations in the corpus

• Transferability of Human Capital and Immigrant Assimilation: An Analysis for Germany (2017, unknown): “In a similar vein, Friedberg (2000) documents that education and labor market experience acquired abroad are significantly less valued than human capital obtained in Israel, and that this difference can fully account for the earnings disadvantage of immigrants relative to their Israeli counterparts.”
• Immigrant earnings profiles in the presence of human capital investment: measuring cohort and macro effects (2004, unknown): “Eckstein and Weiss(2003) propose an immigrant assimilation model in which immigrants learn more about the host country labour market and become better able to implement their human capital in it the”
• The Labour Market Characteristics and Labour Market Impacts of Immigrants in Ireland (2005, unknown): “7 A similar observation has been made in the case of Israel which has also experienced high-skilled immigration (Eckstein and Weiss, 2004) 8 It should be recalled from footnote 3 that most of the immigrants will have arrived in the later part of the ten-year period under investigation rather than in”
• Does Immigration Affect the Long-Term Educational Outcomes of Natives? Quasi-Experimental Evidence (2009, unknown): “impact on the Israeli labour market, see Eckstein and Weiss (2002; 2004) and Cohen-Goldner and Paserman (2004; 2006).”
• Immigrants in the British Labour Market (2005, unknown): “See, among others, Antecol, Cobb-Clark and Trejo (2003), Green and Green (1995), Dustmann (1993), Eckstein and Weiss (2004) and Zimmermann and Bauer (2002).”
• Return migration: theory and empirical evidence (2007, unknown): “Papers such as Chiswick (1978) and Borjas (1985) for the United States; Baker and Benjamin (1994) for Canada; Friedberg (2000) for Israel; Bell (1997) and Chiswick (1980) for the UK; and Barth et al. (2004) for Norway all implicitly assume migrations as permanent.”