Immigrant Labor Market Integration

BPDA Research Division, July 2022

Migration, Assimilation, and Integration

The “Emma Lazarus Frame”

"Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!"

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• There is a widespread belief that migration is caused by poverty, economic stagnation, and overpopulation in the countries of origin unrelated to receiving countries’ foreign policies, economic needs and broader international economic conditions;

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• While overpopulation, poverty, and economic stagnation all create pressures for migration, there are systematic, structural relations between Receiving Countries’ policies and migration flows with worldwide evidence of a considerable patterning in the geography of migrations.

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• They are also penetrating the world of commerce:

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• Immigrants own 25% of all U.S. public venture-backed companies;

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• 47% of all private ventured-backed companies, and

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• more than half of all Silicon Valley startups

Roughly a third of all Nobel Prize winners in the U.S. have been immigrants. In

1999, all U.S. winners of the Nobel Prize were immigrants (Marcelo M. Suarez-Orozco, 2002).

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• Moreover, it is not the poorest people in a country who migrate, nor do they come from the poorest countries. Among them, there are doctors, scientists, investors, technologists, etc…;

Integration - The “Melting Pot Frame”

“We shall … assimilate and digest what we have into pure Americans, with American aspirations, and thoroughly familiar with the love of American institutions” (Senator Ellison DuRant Smith of South Carolina 1920s).

• At the turn of the 20^th Century, “assimilation” clearly meant conformity to Anglo-Saxon ways - a problem today given the diversity of American society and that of the immigrant groups arriving in the country (Gordon, 1964);

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• Over time, immigrants are expected to “assimilate” into the dominant society’s socio-cultural and economic systems while simultaneously shedding their “old” cultural practices and political loyalties (Alba, 1985);

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• Marcelo M. Suárez-Orozco points out that in the global era, the tenets of unilineal assimilation are no longer relevant. Today there are clear advantages to being able to operate in multiple cultural codes … to traverse cultural spaces (Marcelo M. Suarez-Orozco, 2002).

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• Despite the assimilation rhetoric, immigrant integration policies (education, training, placement, ESOL, health care, entrepreneurship, citizenship, etc..) are skeletal, ad hoc, and under-funded;

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• Faced with this situation and labor market discrimination, immigrants create religious and civic organizations and self-employment opportunities to help in their integration;

• Immigrant entrepreneurs have been found to do better economically than their waged co-ethnics even when controlling for human capital characteristics (Portes and Zhou 1999);

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• Immigrants are represented in low-skilled occupations as well as among scientists, doctors, engineers, accountants, nurses;

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• Immigrants started many of the high tech forms in Silicon Valley.

A new frame “Keeping Feet in Both Worlds”

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“…the many social connections and organizations that tie migrants and non-migrants to one another create a border-spanning arena that enables migrants, if they choose, to remain active in both worlds…”

• Immigrant transnationalism refers to the regular engagement in economic, political and socio-cultural activities spanning national borders;

• Transnational entrepreneurs have played an important role in facilitating international trade, investment, and “diaspora tourism;”

• Transnational entrepreneurs do better economically than their waged co-ethnics and pure local immigrant entrepreneurs (Portes and Zhou 1999; Logan, Alba, and McNulty 1994; Wilson and Martin 1982):

• Contexts of exit and modes of incorporation facilitate or impede, foster or discourage, successful integration and cross-border activities:

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Contexts of Exit and Incorporation

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Context of Incorporation:

• Inclusion & Exclusion Structures
• Alien versus Citizenship Rights
• Government & Other Support Systems
• Language Skill Acquisition
• Race and Ethnicity Structures
• Labor Market Barriers
• etc.

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Context of Exit:

• Education Level
• Language Spoke
• Race & Ethnicity
• Family Wealth
• Urban versus Rural Origin
• Government & Other Support Systems
• etc.

Defining and measuring labor market integration

• Participation in the labor market is one of the most important factor for the successful economic integration of immigrants;

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• Like other residents, immigrants participate in the labor market as salaried workers or self-employed persons;

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• Successful immigrant labor market integration is measured by their ability to achieve, on average, the same standing in the labor market as native-born workers;

• Labor market integration is measured here by one’s likelihood of being employed, the type of work they do, and their compensation;

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• The smaller the gap between the foreign and native born, the more successful the labor market integration of immigrants

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• The unit of analysis is not the individual but the population or populations of foreign-born individuals – we measure population level integration;

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• We measure labor market integration by creating a ratio with the native-born level of achievement set at 1.0

Ratios of Foreign-Born to Native-Born Labor Market Outcome Indicators, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Foreign-born residents work at nearly the same rate as native-born but earn less and occupy fewer managerial positions. Their self-employment rate is

Ratios of Labor Market Outcome Indicators by Nativity & Gender, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Foreign-born women have lower earnings and are less likely to be employed.

Ratios of Labor Market Outcome Indicators by Nativity & Citizenship, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

There is no significant difference in most labor market indicators between naturalized citizens and non citizens, with the exception of median earnings. However, both foreign-born groups are below the native-born comparison point.

Ratios of Labor Market Outcome Indicators by Nativity & Educational Attainment, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

A bachelor’s degree bolsters labor market integration outcomes, but does not erase the difference between native and foreign born.

Ratios of Labor Market Outcome Indicators by Nativity & English Proficiency, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Self-employment is a means to work for foreign-born residents who are not English proficient.

Ratios of Labor Market Outcome Indicators by Nativity & Race/Ethnicity, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Foreign-born non-Hispanic Whites have earnings and occupations similar to native-born Whites

Labor Market Integration Comparison, 2019

Source: 2015-2019 American Community Survey (PUMS), BPDA Research Division Analysis

• Disparities in labor market integration between native and the foreign-born manifest themselves in disparities in standard of living between households of the native and foreign-born;

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• The smaller the gap between the foreign and native born, the more successful the labor market integration

of immigrants

• The unit of analysis is not the individual but

the population, or populations, of foreign-born

individuals – we measure population level

integration;

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• We measure labor market integration by

creating a ratio with the native-born level of

achievement set at 1.0.

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Ratios of Foreign-Born to Native Born Standard of Living Indicators

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

The median household income of foreign-born households is ~ a 1/3 less than that of native-born households, and they are more likely to be burdened by housing costs, and 24% less likely to own their home.

Ratios of Standard of Living Indicators by Nativity & Citizenship, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Naturalized citizens have higher standards of living than non-citizens.

Ratios of Standard of Living Indicators by Nativity & Gender, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Foreign-born female headed households have a lower standard of living.

Ratios of Standard of Living Indicators by Nativity & English Proficiency, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

English proficiency is correlated with higher household income, lower poverty rates, and higher homeownership.

Ratios of Standard of Living Indicators by Nativity & Arrival Date, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Foreign-born residents who have lived in the US for longer have a homeownership and poverty rate that is on-par with native-born individuals despite having a lower median household income.

Ratios of Standard of Living Indicators by Nativity & Race/Ethnicity, 2019

Source: U.S. Census Bureau, 2015-2019 American Community Survey, Public Use Microdata Sample (PUMS), BPDA Research Division Analysis.

Native Born, Non Hispanic White residents have a higher standard of living compared to the foreign born residents and native born residents of color.

Standard of Living Indicators Comparison, 2019

Source: 2015-2019 American Community Survey (PUMS); BPDA Research Division Analysis