Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 20/2002: Local Unemployment and the Relative Wages of Immigrants: Evidence from the Current Population Surveys

Erling Barth (), Bernt Bratsberg () and Oddbjørn Raaum ()
Additional contact information
Erling Barth: Institute for Social Research in Oslo, Postal: Postbox 3233 Elisenberg, N-0208 Oslo, Norway
Bernt Bratsberg: Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, N-0349 Oslo, Norway
Oddbjørn Raaum: Ragnar Frisch Centre for Economic Research, Postal: Gaustadalléen 21, N-0349 Oslo, Norway

Abstract: We provide evidence on wage profiles of immigrants using CPS data from 1979 to 2001, taking into account that changes in labor market conditions impact natives and immigrants differently. High rates of immigrant wage assimilation in general, and relatively high wages of immigrant cohorts that arrived during the 1990s in particular, can largely be explained by a negative trend in unemployment in the data. Relating immigrant and native period effects to local labor market unemployment, we find that wage assimilation among lesser-educated immigrants is negligible and that the immigrant-native wage gap is strongly increasing in unemployment. For highly educated immigrants, rates of wage assimilation during early years in the United States are higher the lower is unemployment.

Keywords: immigrants; unemployment; assimilation

JEL-codes: J61; J82

55 pages, June 17, 2003

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