The economic impact of immigration depends both on how immigrants perform in the United States when they first enter the country, as well as on their long-run economic prospects. Beginning with Chiswick’s (1978) pioneering work, this dual concern has guided much of the empirical research in the economics of immigration. The literature has typically found that immigrants earn less than natives at the time of entry (with the entry wage disadvantage being larger for more recent cohorts), and that the wage gap between immigrants and natives narrows over time as immigrants “assimilate” in the United States. Many studies conclude that the rate of wage convergence between immigrants and natives is not very large, so that the most recent immigrant waves will probably suffer from a substantial wage disadvantage for much of their working lives.
The literature also stresses that there are sizable differences in economic performance among national origin groups (Boijas, 1987; LaLonde and Topel, 1992; and Funkhouser and Trejo, 1995). For the most part, these studies have examined the impact of national origin on the wage level of immigrants in the United States, and the data suggest that immigrants who originate in developed countries earn more than immigrants who originate in poorer countries. The sizable wage differentials among national origin groups combined with the changing national origin mix of the immigrant population in the United States has been the crucial factor in generating the trends in cohort “quality” that have been the subject of intense interest, both in academic studies and in the policy debate.