THE ECONOMIC PROGRESS OF IMMIGRANTS: Investments in Education

The previous section documented that the rate of wage growth experienced by immigrants cohorts responded to source country characteristics that proxy for either the effective rate of human capital or the discounting factor. This section shows more directly that source country characteristics do indeed alter the rate of human capital accumulation by examining the determinants of investments in educational attainment in the post-migration period.

I computed the change in educational attainment experienced by each of the immigrant cohorts (by country of origin, year of arrival, and age at migration) during their first ten years in the United States. I then estimated regressions, identical to those presented in earlier sections, that describe both the extent of convergence in educational attainment across immigrant cohorts, as well as the link between investments in schooling and source country characteristics. The estimated regressions are reported in Table 8.


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The first two columns of the table report the simple convergence regressions by relating the change in educational attainment during the first 10 years to the educational attainment at the time of entry. As with the analysis of wage convergence, the “raw” correlation is positive, but weak. If the regression also includes a vector of country-of-origin fixed effects, however, these correlations become negative and significant. Not surprisingly, immigrants who originate in the same country of origin (but arrive at different times and at different ages) tend to converge to the same educational attainment.

Nevertheless, the main implication of the evidence is that immigrants who have the highest level of effective human capital at the time of entry are also the ones who make the largest post-migration investments, and hence experience the fastest rate of economic progress. Once again, the empirical evidence suggests some complementarity between pre-existing human capital and the rate of human capital accumulation in the United States.