This paper reports estimates of simple wage equations fit
to cross-sectional and pseudo-longitudinal data for Canadian
immigrants in the 1971 and 1981 Canadian censuses. The
estimates are used to assess (1) the usefulness of crosssectional
analyses for measuring the pace of immigrant earnings
growth, (2) the labor market implications of admissions
policies that place different weights on the work skills
possessed by prospective entrants, and (3) the relative impact
of selective outmigration and job-matching on the shape of
immigrant earnings distributions as duration of stay increases.
The estimates provide evidence of a small to moderate
assimilation effect that suggests that immigrants make up for
relatively low entry wages, although the wage catch-up is not
complete until 13 to 22 years after entry into Canada. These
results are revealed clearly in both the pseudo-longitudinal
and the cross-sectional analyses. The estimates also provide
evidence that the unobserved quality of immigrants' labor
market skills declined following changes in Canada's
immigration policies in 1974 that led to a sharp increase in
the proportion of immigrants admitted on the basis of family
ties. Finally, since there is no evidence that the variance of
immigrant earnings increases with their duration of stay in
Canada, and since there are no differential immigrant-native
changes in higher-order moments of the earnings distribution as
duration of stay increases, the results are inconclusive with
respect to the importance of selective outmigration and job
matching in the evolution of immigrant earnings distributions
over time.
*Published:
With Christopher L. Cavanagh, published as "An Analysis of the Selection of Arbitrators", American Economic Review, Vol. 76, no. 3 (1986): 408-422.
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