THE ECONOMIC PROGRESS OF IMMIGRANTS: Investments in Education 2

The remaining columns of the table report regressions of the change in educational attainment on the source country characteristics. For the most part, the regressions confirm the results reported in the previous section. The source country characteristics tend to affect investments in education in the same way that they affect the rate of wage growth.

Immigrants who originate in countries where the income distribution has a large Gini coefficient (and presumably there is a large rate of return to skills) acquire less schooling in the post-migration period; immigrants who originate in open economies acquire more schooling; and immigrants who originate in richer countries acquire less schooling (but this anomalous correlation is not significant).

Summary

This paper presented a theoretical and empirical study of the determinants of economic progress in the immigrant population. The theoretical framework used the human capital model to derive the relationship between the human capital endowment of immigrants at the time they enter the United States, the entry wage of the immigrant cohort, and the subsequent rate of wage growth.

The theory showed that the correlation between initial (log) wages and the rate of wage growth could be positive if there existed some complementarity in the production function for human capital, so that highly skilled immigrants would find it easier to acquire additional human capital in the United States. The potential existence of relative complementarity has practical significance: the sizable skill differentials that are observed among immigrant groups at the time of entry could well widen over time.