immigrant native substitutability: role abilityethang/immnat.pdfaffect substitutability with...

Immigrant‐NativeSubstitutability:theRoleofLanguageAbility

EthanLewis*

DartmouthCollegeandNBER

December2012

Abstract.Wageevidencesuggeststhatimmigrantworkersareimperfectlysubstitutablefornative‐bornworkerswithsimilareducationandexperience.UsingU.S.CensusesandrecentAmericanCommunitySurveydata,Iasktowhatextentdifferencesinlanguageskillsdrivethis.Ifindtheyareimportant.Iestimatethattheresponseofimmigrants’relativewagestoimmigrationisconcentratedamongimmigrantswithpoorEnglishskills.Similarly,immigrantswhoarriveatyoungages,asadults,bothhavestrongerEnglishskillsandexhibitgreatersubstitutabilityfornative‐bornworkersthanimmigrantswhoarriveolder.InU.S.marketswhereSpanishspeakersareconcentrated,Ifinda“Spanish‐speaking”labormarketemerges:insuchmarkets,thereturntospeakingEnglishislow,andthewagesofSpanishandnon‐Spanishspeakersrespondmoststronglytoskillratiosintheirownlanguagegroup.Finally,inPuertoRico,wherealmostallworkersspeakSpanish,Ifindimmigrantsandnativesareperfectsubstitutes.Theimplicationsforimmigrantpovertyandregionalsettlementpatternsareanalyzed.

JEL:J24,J31,J61Keywords:immigration,language,wages,labormarkets

*IthankStevenRaphaelandDavidCard,theeditorsoftheRussellSagevolumeImmigration,PovertyandSocioeconomicInequalityinwhichafutureversionofthispaperwillappear,andmycolleaguesatDartmouthforhelpfulcommentsandChrisBachand‐Parenteforoutstandingresearchassistance.IalsothanktheRussellSageFoundationandDartmouthCollegeforfundingthisresearch.

StudieshavefoundthatthemassiveflowofimmigrantsintotheU.S.inthepastfewdecadeshas

hadlittlenegativeimpactontheaveragewagesofnative‐bornworkers(reviewsincludeBorjas,

1994,andFriedbergandHunt,1995;amorerecentarticleisOttavianoandPeri,forthcoming,

hereafter“OP”).However,manyofthesesamestudiestendtofindthatthenewarrivals

substantiallydepressedthewagesofpreviousimmigrantarrivals(Card,2001;OP).1Thefactthat

immigrantsseem,bythisevidence,nottofullycompeteinthenativelabormarketmaycontribute

totherelativelyhighratesofpovertyamongimmigrants,andunderstandingwhytheydonotmay

informpoliciesaimedatreducingimmigrantpoverty.

AplausibleexplanationforwhyimmigrantsdonotfullycompeteisthattheirlimitedEnglishskills

restrictthemtooccupationswhereEnglishskillsarelessimportant.Theabilitytospeaka

country’snativelanguageisassociatedwithhigherwages(e.g.,ChiswickandMiller,1995,2007;

Carliner,1996;DustmannandFabbri,2003;BleakelyandChin,2004;Ferrer,GreenandRiddell,

2006).Inaddition,less‐skilledimmigrantsintheU.S.appeartospecializeinoccupationswhich

requirerelativelylittlecommunication(PeriandSparber,2009),althoughfactorsbesides

immigrants’relativelackofEnglishskills(suchasagreaterwillingnesstoworkinmanualjobs)

couldcontributetothis.

Inthischapter,Iaskhowimmigrants’languageskillsaffecthowcloselytheycompetewithnative‐

bornworkers.Aswasdescribedintheintroduction,howcloselytwodifferentgroupsofworkers

(inthiscase,immigrantsandnatives)competeinthelabormarketisrevealedbyhowcloselytheir

wagesmovetogetherinresponsetochangesinthesizeofonegrouprelativetotheother.In

economicsjargon,twogroupsofworkersaredescribedas“perfectsubstitutes”iftheirwagesmove

insyncinresponsetochangesinrelativenumbers:fromthelabormarket’sperspectivetheyare

1InOP’spreferredspecification,forexample,thelargestestimatedimpactofimmigrationsince1990theycanfindontheaveragewagesofnative‐bornhighschooldropoutsis‐0.1percent,comparedto‐8.1percentforimmigrants.Muchofthemorerecentliterature(e.g.,Card,2001,2009)doesnotexamineimpactsonaveragewagesdirectly,butinsteadfocusesonthewagegapsbetweengroupsofnativeworkers.Evenmeasuredthisway,however,theimpactonless‐skillednativesisgenerallyfoundtobesmall.

identical.Incontrast,twogroupsare“imperfectsubstitutes”ifanincreaseinthesizeofonegroup

relativetoasecondgrouplowerthewagesofthefirstgrouprelativetothesecond.Themore

responsiverelativewagesaretorelativesupply,thelessdirectlythesetwogroupscompeteinthe

labormarket.IntheU.S.,immigrantsandnativeswithsimilareducationandexperienceare

imperfectsubstitutes(OP).

Putanotherway,then,thischapteraskswhetherimmigrantswithstrongEnglishlanguageskills

areclosersubstitutesfornativesthanimmigrantswithpoorEnglishlanguageskills.Specifically,it

asksiftherelativewagesofimmigrants(thatis,relativetonatives’wages)whospeakEnglishwell

respondmoretochangesintherelativetotalhoursworkedbyimmigrantsthandotherelative

wagesofimmigrantswhospeakEnglishpoorly.Toestimatethisrelationship,Irelyprimarilyon

variationacrossmetropolitanareas,usingdatafromthe2000U.S.CensusofPopulationand

AmericanCommunitySurveysfrom2007‐2009(Rugglesetal.,2010).Allcomparisonsaremade

withinbroadeducationgroups(highschoolorless,morethanhighschool)thatpreviousresearch

hasfoundrepresentdistinctlabortypes(Card,2009;GoldinandKatz,2008).Thesedatacontain

self‐reportsofEnglishlanguageskills.Aslanguageskillsmaybecorrelatedwithotherfactorsthat

affectsubstitutabilitywithnatives,suchaslegalstatus,Ialsomakecomparisonsbyageatarrival

andtimeintheU.S.,exploitingthefactthatimmigrantswhoarriveintheU.S.aschildrentendto

havefarbetterEnglishlanguageskillsasadults(BleakleyandChin,2004),and,similarly,that

EnglishskillstendtorisewithtimeintheU.S.Theideaisthatlegalstatus(andotherfactors)may

haveaweakerrelationshipwithEnglishskillsacrossthesegroups.

TheabovediscussioniswrittenasifallcommunicationmusttakeplaceinEnglish,butinsome

partsoftheU.S.,Spanishisalsoanimportantlanguage.AnextremecaseisPuertoRico,whereboth

“immigrants”(whoincludeforeign‐bornfromLatinAmericancountries,aswellasU.S.bornethnic

PuertoRicans)andnativesspeakSpanish.Asafurthertestofthelanguagehypothesis,Iask

whetherwagemovementsrevealPuertoRicanimmigrantsandnativestobeperfectsubstitutes.

SincePuertoRicoisusuallyconsideredtobeasinglelabormarket(e.g.,Borjas,2008),itisnot

possibletoexploitgeographicvariationinthesizeoftheimmigrantpopulation.Instead,this

analysisreliesonvariationovertimeandacrossdetailededucationandexperiencegroupsinthe

relativesizeoftheimmigrantpopulation,similartoOP,usingPuertoRicanCensusesfrom1970to

2000alongwiththe2007‐2009PuertoRicanCommunitySurveys(Rugglesetal.,2010).Ialso

performaparallelaggregateanalysisofthecontinentalU.S.

InlessextremecasesthanPuertoRico,Spanishcanbeadominantlanguage,likeinMiamiandLos

Angeles,orprevalentifnotdominant,likeinChicagoandSanFrancisco.Ialsoconsiderwhether

thedensityofSpanishspeakersaffectshowsubstitutableSpanishspeakingimmigrantsarefor

natives.Underwhatconditionsdoesaparallel“Spanish‐speaking”labormarketdevelopinthe

area?AkeyhypothesisfromtheoryisthatitrequiresnotjustalargenumberSpanishspeakers

overall,butasufficientlyrichdistributionofskillsamongSpanishspeakers.This,forexample,

distinguishesMiami‐‐wheremajorityofbothhighlyeducatedandlesseducatedworkersspeak

Spanish‐‐fromChicago,whereSpanishspeakersaredisproportionatelylesseducated.

Nearlyalloftheresultsareconsistentwiththeviewthatlanguageskillsareanimportantsourceof

imperfectsubstitutabilitybetweenimmigrantsandnatives.Theestimatesimplythattheincrease

inthelaborsuppliedbyimmigrants(relativetonatives)since1990intheaveragemetropolitan

areaisassociatedwithabouta6percentdeclineinthehourlywageofimmigrantswithpoor

Englishlanguageskills,butonlya2percentdeclineinthewagesofimmigrantswithstrongEnglish

languageskills(eachrelativetonativeswithsimilareducationandworkexperience).Ialsofind

thatthewagesofimmigrantswhoarrivedasyoungchildrenandlongagoarelesssensitiveto

immigrantrelativesupplythanthosewhoarrivedandolderagesandrecently.Alsoconsistentwith

languagedrivingimperfectsubstitutability,inPuertoRicoimmigrationisnotassociatedwitha

declineinthewagesofPuertoRicanimmigrantsrelativetoPuertoRico‐bornworkers.

WithintheU.S.,severalpiecesofevidencesuggestaparallelSpanish‐speakinglabormarket

emergesinareaswhereSpanishspeakersaresufficientlynumerous,and,inparticular,wherethe

skilldistributionofSpanish‐speakersissufficientlyrich.First,forSpanishspeakers,thewage

premiumforspeakingEnglishissmallinmarketswithaheavySpanish‐speakingpresence,

particularlythosewithaheavyeducatedSpanish‐speakingpresence.Second,aninfluxofless‐

educatedSpanishspeakersisassociatedwithalargerdeclineinthewagesofSpanish‐speaking

thannon‐Spanish‐speakingless‐educatedimmigrants.Third,aninfluxofeducatedSpanish‐

speakersisassociatedwithanincreasethewagesofSpanish‐speakingbutnotnon‐Spanish‐

speakingless‐educatedimmigrants.Thereasonthisthirdfactisrelevantisthatinstandardmodels

(liketheoneusedinChapter2)aninfluxofmoreeducatedworkersispredictedtoraisethewages

oflesseducatedworkersiftheyareinthesamelabormarket.Thus,thisthirdfactalsosuggests

Spanish‐andnon‐Spanishspeakersoperateinparallellabormarketsinthesamearea.

Thefindingsrefineourunderstandingoftheforceswhichaffectimmigrantpoverty.Previous

researchalreadysuggestedthatthewageimpactsofimmigrationwerebornedisproportionatelyby

immigrantsthemselves,(e.g.,Card2001;OP)andtheseresultssaythattheyareborneparticularly

stronglybyimmigrantswithpoorEnglishlanguageskills,whoareamongthepoorestimmigrants

(inrecentU.S.data,29percentofimmigrantswhodonotspeakEnglishwereinpoverty,compared

to15percentofimmigrantsoverall),andbySpanish‐speakingimmigrants.Theestimateshereare

consistentwiththeincreaseinimmigrationsince1990contributinganadditionalonetotwo

percentagepointstothepovertyrateofless‐educatedlow‐Englishimmigrants,andanadditional

twotofourpercentagepointstothepovertyratesofless‐educatedSpanish‐speakingimmigrants.

However,povertyratesamongtheseimmigrantgroupsfelloverthisperiod,sothisresultonlysays

thatimmigrantpovertyrateswouldhavefallenmorequicklywithoutadditionalimmigration.2

I. MotivationandBackground

Itisusefultobeginwithsomebasicfactsaboutimmigrants’andnatives’languageskillsandwages.

PanelAofTable1showsaverageEnglishskillsforimmigrantsandnatives.Itwasconstructedby

combiningdatafromthe2007,2008and2009AmericanCommunitySurveys(Rugglesetal.,2010)

fortheworking‐ageresidentsof136highimmigrationmetropolitanareasdescribedbelow.3These

metropolitanareascontainover80percenttheimmigrantslivingintheU.S.Table1alsoshows

separatemeansbywhetherornottherespondenthasanycollegeeducation.Throughoutthe

paper,thosewithahighschooldegreeorlesswillbereferredtoas“lesseducated”andwillbea

focusoftheanalysis,astheymakeupadisproportionateshareofthoseinpoverty.

ThefirstlineofPanelAshowsthatonly46percentofimmigrantsspeakEnglish“only”or“very

well.”Incontrast,amongthenative‐born,thisnumberisover98percent(lowerhalfoftable).Toa

usefulfirstapproximation,U.S.nativesarefluentinEnglish,whereasonlyhalfofimmigrantsare.

Thelatterrisesto68percentifyouincludeimmigrantswhosaytheyspeakEnglish“well”(butnot

“verywell”).BythisbroadermeasureofEnglishproficiency,abouthalfofimmigrantswithout

collegeareproficientinEnglish,and90percentofimmigrantswithcollegeeducationareproficient

inEnglish(columns2and3).

2Althoughpovertyratesroseamongimmigrantsoverallduringthisperiod–seeintroduction–povertyratesamonglesseducatednon‐Englishspeakingimmigrantsfellfrom35to30percentbetween1990and2008,andamongSpanishspeakersfrom25to22percent.3“Workingage”isdefinedasbeingbetweenage16and65andwithatleastoneyearof“potentialworkexperience”whichmeansbeingoldenoughtohavespenttimeoutsideofschoolgivennormalprogressionthroughschool.

Spanishspeakerswillalsobeafocusofthisstudy,andPanelBshowstheEnglishskillsofjustthose

immigrantsandnativeswhoreportspeakingSpanishathome.Spanish‐speakingimmigrantshave

belowaverageEnglishskills,withonly26percentfluentinEnglish;evenwithineducationcategory

theirEnglishskillsarebelowaverage.ThisismostlydrivenbyMexicanswhoarethelargest

immigrantgroupandwhohavepoorEnglishskills.(74percentofMexicanimmigrantsinthis

samplereportspeakingEnglishnotwellornotatall.)EvenU.S.‐bornSpanishspeakers,whomake

up7.7percentoftheworking‐agepopulation,haveimperfectEnglish.Only82percentclaimtobe

fluentinEnglish,andalmost7percentsaytheydonotspeakEnglishwelloratall.4

TheanalysisbelowalsoexploitsvariationinEnglishskillsbyimmigrants’ageatarrivalandtimein

theU.S.Figure1ashowsaveragelanguageskillsbythesecharacteristics.Thesharewhospeak

EnglishwellhasapositivemonotonicassociationwithtimeintheU.S.,risingfromhalfofthosewho

arrivedinthepastfiveyearsto90percentofthosewhohavebeenintheU.S.atleast40years(a

patternwhichmaypartlyreflectcohortdifferencesinEnglishskills).Figure1aalsoshowsthe

sharpdeclineintheshareofimmigrantswhospeakEnglishwell(asadults)inageatarrival:itis

higheramongthosewhoarrivedbeforeage10comparedtothosewhoarrivedatolderages.This

factwasexploitedinBleakleyandChin(2004)(BC)tostudytheeffectoflanguageskillsonwages.

Theyarguedthatthereisa“criticalperiod”atyoungageswhenchildrenareabletoeasilylearn

English.Below,Iaskifthereisasimilarkinkedrelationshipinthesubstitutabilityofimmigrants

fornativesbyageatarrival.5Figure1bshowsthatthiskinkedrelationshipismainlypresent

amongless‐educatedimmigrants;amongmoreeducatedimmigrants,therelationshipissmoother.6

4Thesenumbersmayunderstatenative‐bornSpanishspeakers’EnglishskillsifthereisatendencyforundocumentedMexicanstoclaimnative‐bornstatus.5NotethatIamnotfullyimplementingBC’smethodshere.AkeythingIamnotdoing,buttheydid,isdifferencingoutage‐at‐arrivalpatternsamongimmigrantsfromEnglish‐speakingcountriestoaccountforotherfactors,besideslanguage,associatedwithage‐at‐arrival.WageresponseestimatesforthesmallnumberofimmigrantsfromEnglish‐speakingcountriesweretoounreliabletoexploitthisapproach.6SplittingthesamplebyageatarrivalandeducationissomewhatproblematicgivenBC’sfindingthatarrivingasayoungchildtendstoraiseeducationalattainment.Theappropriateapproachinlightofthisistoaggregatetogethermore‐and

SuggestiveevidencethatEnglishskillsareimportantforeconomicwell‐beingisshowninTable2,

whichshowsmeanloghourlywagesandpovertybynativity,education,andEnglishandSpanish

languageskills.ThefirsttworowsofPanelAshowthatevenwithineducationcategory,

immigrantstendtoearnlessthannatives.Forexample,lesseducatedimmigrantsearnonaverage

18logpoints(about18percent)lessthanlesseducatednatives.Thenextrowshows,pertinentto

theideathatlanguageskillsmightmatterforthiswagegap,thewagesofimmigrantswhoarefluent

inEnglishareverysimilartothatofnatives,includingamongless‐educatedimmigrantsand

natives.Thereisalsoasteepwagegradientinself‐reportedEnglishskills,shownbelowthat.

Thesewagedifferencestranslatetodifferencesinpovertyaswell,showninpanelB.Whereas30

percentofless‐educatedimmigrants(andeven23percentofthosewithcollegeeducation)whodo

notspeakEnglishareinpoverty,only14‐16percentofless‐educatedimmigrantswhospeak

Englishwellorverywellareinpoverty,similartopovertyratesamongless‐educatednatives.

Finally,thebottomrowsofTable2showthatSpanishspeakersareworseoffthanthetypical

immigrant,somethingtheirpoorEnglishskills(Table1)likelycontributesto.Immigrantswho

speakonlySpanish,showninthebottomrowofthetable,havewagesandpovertyratesaboutthe

sameasthetypicalnon‐Englishspeaker.

Thewagegapbetweenlesseducatedimmigrantsandnativesisanalyzeddirectlyinmultivariate

regressionsinTable3.Column(1)repeatsthefindinginfromcolumn(2)ofTable2,thatless‐

educatednativesearnabout18percentlessthanless‐educatednatives.Column(2)ofTable3

showsthatasinglecontrolvariable‐‐adummyforspeakingEnglishonlyorverywell‐‐can

accountformostofthisgap.Thecoefficientonthiscontrolsuggeststhatthereisa21percentwage

premiumtospeakingEnglishfluently,afindingwhichisconsistentwithpreviousestimatesofthe

returnstospeakingEnglishintheU.S.labormarkets(e.g,ChiswickandMiller,1995,andCarliner,

less‐educatedworkers.Becausetherestoftheanalysisissplitbyeducation,however,Iwillsplititthiswayfortheestimatesbyage‐at‐arrival.

1996).ThislikelyoverstatesthecausaleffectofEnglishspeakingability,however.Column(3)

showsthattheadditionofsimpledemographicandskillcontrolsreducesthemagnitudeofthis

coefficient.EstimatesinBC’sstudyexploitingageatarrivalare,infact,consistentwithnocausal

effectofEnglishlanguageskillsonwages.Theycouldaccountforwagegapsacrossimmigrants

withvaryingEnglishlanguageskillsentirelywitheducationdifferencesacrossthesegroups.

ThelastthreecolumnsofTable3focusonthelargeminorityofAmericans‐‐bothimmigrantsand

natives‐‐whospeakSpanishathome.Column(4)showsthatthereisasomewhatsmallerreturn

toEnglishfluencyamongSpanish‐speakers,andthat,conditioningonEnglishfluency,thereisno

immigrant‐nativewagegap.MightEnglishskillsmatterlesswhentherearelargenumbersofother

Spanishspeakersinthesamelabormarket?Tofindout,column(5)addsaninteractionbetween

theEnglishfluencydummyandtheshareofthemetroarea’spopulationwhospeakSpanishat

home.Thecoefficientonthisinteractionisnegativeandsignificant,consistentwiththeideathat

Englishskillsbecomelessvaluable(forSpanishspeakers)asthesizeoftheSpanish‐speaking

populationincreases.Indeed,thiscontrolraisesthecoefficientonEnglishfluencydummybackto

itslevelinthefullsample;thatistosay,thefactthatSpanishspeakersaregeographically

concentratedfullyaccountsfortheirloweraveragereturntospeakingEnglish.Column(6)splits

theSpanish‐speakingshareintosharesamongthemore‐andless‐educatedpopulations.

Consistentwithwhatwashypothesizedintheintroduction‐‐thatitrequiresasufficientlyrich

distributionofskillstocreateaSpanish‐speakinglabormarket‐‐itisonlytheSpanish‐speaking

shareamongmoreeducatedworkerswhichisassociatedwithadiminishedimportanceofEnglish

languageskillsamonglesseducatedworkers.Totakeanextremeexample,inmarkets,likeMiami,

whereamajorityofcollegeeducatedworkersspeakSpanish(seeAppendixTableA1forother

examples)theseestimatespredicttherewillbenopremiumtoEnglishfluency.7Below,Ireassess

7Thoughthisresultisquitepreliminary,itdoesprovidesomecounterweighttotheevidencethatthetendencyforimmigrantstogeographicallyclusterisbadforthem(e.g.,Cutler,Glaeser,andVigdor,2008).Tobefairtothoseauthors,

howtherelativewagesofSpanish‐speakingimmigrantsisaffectedbythedensityofSpanishand

Englishspeakersinthelabormarket,usingtheestimationframeworkIdescribenow.

II. TheoryandDerivationofanEstimationEquation

AstartingpointforasimpletheoryofhowlanguageskillsmatterintheU.S.labormarketisthe

notionthatamongthosewithotherwisesimilarskills,thosewhocannotcommunicateinEnglish

well(hereafter,“speak”Englishforshort)imperfectlysubstituteforworkerswhodo;theformer

mightnotbeveryeffectiveinoccupationswhichrequirealotofcommunication,forexample(Peri

andSparber,2009).Forsimplicity,imagineworkerscanbesharplydividedintothosewhocanand

cannotspeakEnglish,indexedwithj=1andj=0,respectively.Ifthesetwotypesareimperfectly

substitutable,thewagepremiumtobeingabletospeakEnglishwilldeclineintherelativenumber

ofworkerswhospeakEnglishandwhodonot,whichIcapturewiththefollowingrelationship:

(1) 1010 lnln LLbaww

Ljisthenumberofworkersandwjisthewageoflanguagetypejworkers,andaandbarepositive

constants.bmeasuresthedegreeofimperfectsubstitutability:itwillbezeroifthosewhocanand

cannotspeakEnglishareperfectsubstitutes.8Inprinciple,(1)couldbeestimatedusingvariation

acrosslabormarketsandovertimeintherelativenumberofworkerswhospeakEnglish“only,”

“verywell”or“well”asaproxyforL1andtheremainingworkersasaproxyforL0.Inordertobe

though,theiranalysisisattheneighborhood,ratherthanmarketlevel.Immigrantsegregationandlanguageisolationarealsoanalyzedinchapter4ofthisvolume.8(1)fallsoutofacapital‐neutralsingle‐goodnestedCESproductionfunctionrepresentationoftheeconomy,wheretheinnermostnestcontainsworkerswithandwithoutEnglishskillsinthiscase,similartotheframeworkusedinchapter2.Inthisinterpretation,thecoefficientbrepresentsaninverse“elasticityofsubstitution”betweenlanguagetypes,and“a”representsademandshifterwhichisafunctionoffactorshareandproductivityparametersembeddedintheproductionfunction.Other,moregeneral,functionalformsarepossible,butthisCES‐derivedapproachiscommon(e.g.,OP;RaphaelandSmolensky,2008).

consistentwithpriorestimatesoftheimpactofimmigrationonwages,however,itisusefulto

translate(1)intosomethingwhichdirectlyinvolvesimmigrantsandnatives.9

Todoso,firstrecallthatnearlyallnativesreportspeakingEnglishfluently.Therelativenumberof

non‐Englishspeakersisdrivenalmostentirelybyimmigration,and,inpractice(demonstrated

below)movesalmostone‐for‐one(inpercentterms)withtherelativenumberofimmigrants.

Mathematically, NF LLcLL lnln 10 ,whereLFandLNare,respectively,thenumberof

foreign‐bornandnative‐bornworkers.Imposingthislinearapproximationon(1),wehavethat:

(1’) NF LLbaww lnln 10

Totranslatethelefthandsideintothewagesofimmigrantsandnatives,firstnotethatsinceall

nativesareassumedtospeakEnglishwecanimposewN=w1.(Inpractice,below,nativeswho

reportimperfectEnglishwillbedroppedfromthewagesample.)Asforimmigrants’wages,the

analysiswillexplorevariationacrossgroupsofimmigrantwithvaryingEnglishability.In

particular,Iwilllookacrossthetenyear“age‐at‐arrival”andfiveyear“yearsinU.S.”categories

showninFigure1(inadditiontodirectlyacrosstheEnglishlanguageskillcategoriesshownin

Tables1and2).Sosupposegindexesthesedifferentcategoriesofimmigrants,andfractiongof

groupgspeaksEnglish.IcanwritethemeanlogwageofgroupgimmigrantsaslnwFg=glnw1+

(1‐g)lnw0+g,wheregrepresentssourcesofimmigrant‐nativewagegapsotherthanEnglish

skills(forexample,ethnicdiscriminationorlegalstatus.)Translatingthisintoaimmigrant‐native

wagegap:

9Anotherpotentialreasontodosoisevidencethatself‐reportedmeasuresoflanguageskillsarenotreliable(DustmanandvanSoest,2001,2002;DustmannandFabbri,2003).Despitethis,theresultsbelowaresimilarlystrongwhenusingself‐reportedEnglishskillsdirectly,suggestingthattheyareatleastreliableenough(attheaggregatelevel)tobeuseful.

gggNFg

lnln1lnln

Substituting(1’)intothisproduces

(2) gNF

ggNFg LLbaww ln1ln

Theintercept,ag,isacombinationofconstants.(2)impliesthatamongotherwisesimilar

immigrantsandnatives,thesensitivityoftherelativewagesofforeignworkerstochangesin

foreignrelativesupplyisdiminishingintheshareofforeignworkersspeakEnglish.Forexample,

immigrantswhoarriveaschildrentendtohavebetterEnglishskillsthanthosewhoarriveas

adults,andso(2)impliesthattherelativewagesofthosewhoarriveaschildrenshouldrespond

lesstoimmigrantinflowsthanimmigrantswhoarriveasadults.

Thissimplemodelleavesoutseveralthings.First,accordingtothemodel,immigrantswithperfect

English,g=1,areperfectsubstitutesfornatives;theirrelativewagesareinsensitivetoimmigrant

relativesupply.Animportantsimplificationusedtoderive(2)wasthatothersourcesofimmigrant‐

nativewagegaps(g)areunrelatedtoimmigrantrelativesupply.Ifthisisnotthecase,theneven

fluentimmigrants’relativewagesmaybesensitivetothenumberofimmigrantsrelativetonatives.

Thismayalsobiasestimateof(2),anissuewhichwillbediscussedfurtherbelow.

Second,thismodelassumesthatEnglishskillsareequallyimportantforalljobs‐‐the“b”in(1)isa

constant.10AsitisplausibleEnglishskillsaremoreimportantinhigh‐skilljobs,theestimates

belowallowtheeffectstovarybytheeducationleveloftheworker.

10ThiswouldbeofgreatconcernonlyifthevariationinthewageresponseacrossimmigrantgroupsweredrivenbyvariationintheimportanceofEnglishratherthantheEnglishskillsoftheimmigrantsinthegroup‐‐thatis,variationin“b”noting.

Finally,thissimplemodelcanalsoonlypartlyaccommodatethefactthatinsomepartsoftheU.S.,

Spanish,notEnglish,isthedominantlanguage.InPuertoRico,wherebothimmigrantsandnatives

speakSpanish,(2)appliesandimpliesimmigrants’relativewagesshouldnotrespondtothe

relativenumberofimmigrants.InmarketswithamixofSpanish‐speakingandEnglish‐speaking

workers,itisnotclearwhatwillhappen,butsometheoriesaresuggestive.AccordingtoLang’s

(1986)theoryoflanguagediscrimination,wagesarelowerforSpanish‐speaking(orgenerally,non‐

Englishspeaking)immigrantlaborersthannativesbecausetheybearthecostoftrainingabilingual

supervisor;however,whereSpanishisspokenbyamajorityofworkers(asitisinsomeU.S.

markets),thesignofwagegapwithnativesreverses.InPeriandSparber(2009),less‐educated

immigrantsaresegregatedintomanualoccupationsbecauseoftheirinferior(English)

communicationskills.Thoughtheydidnotdiscussitinthepaper,onemightimaginethatwitha

largeenoughdensityoffellowSpanishspeakers,itmightbepossibleforSpanishspeakerstohave

accesstoafullrangeofoccupations.11Inboththeories,havingenoughskilled(Lang’s

“supervisors”)oreducatedSpanishspeakerswouldbeimportantforaseparate“Spanish”labor

markettoemerge,whichissupportedbypreliminaryevidenceinTable3.Thiswillbeevaluated

belowbyaddingtermsto(2)measuringthesizeoftheSpanish‐speakinglaborpoolbyeducation.

III. EstimationandIdentification

Themainestimatesof(2)willusevariationacrossskillgroupsandmetropolitanareasinthe

relativeaggregatehoursworkedoftheimmigrantpopulation,asfollows:

(3) gictNict

Fictggit

Fgict HHww lnln

11Inparticular,onemightassumetheoutputofPeriandSparber’sproductionfunctionmadewithSpanish‐speakingworkerswasperfectlysubstitutablefortheoutputmadewithEnglish‐speakingworkers.

whereiindexestwoeducationgroups(highschoolorless,morethancollege)andcindexes

metropolitanareas,andHrepresentstheaggregatehoursofthespecifiedgroup.gistheestimate

of‐(1‐g)bin(2)whichisexpectedtobenegativeandtobesmallerinmagnitudeforimmigrants

withstrongerEnglish‐languageskills.(3)willbeestimatedbothjointlyandseparatelyby

educationgroup.

Allestimatesof(3)includetime‐varyingeducationgroupcontrols,git,which,liketheslope,willbe

allowedtovaryacrossimmigrantgroups,g.Thesecontrolscaptureeconomy‐widechangesinthe

wagestructure.Thedependentvariablewillbecomputedasthedifferenceinthemeanlogwages

ofimmigrantsingroupgandnativeswiththesameeducation,i,inthesamemetropolitanarea,c,

andyear,t,or“cellict”forshort.12Toreducetheinfluenceofcompositionaldifferencesbetween

immigrantsandnativesonthisestimatedmeanwagegap,natives’meanwageswillbecomputed

usingweightsthatgivethem,onaverage,thesameeducationandexperienceastheimmigrantsin

groupgincellict.13(Inpractice,therawwagegapproducessimilarresults.)(3)willbeestimated

byordinaryleastsquares(thatis,unweighted)andstandarderrorswillbecomputedtoberobust

toarbitraryerrorcorrelationacrossobservationsonthesamemetropolitanarea.

Theerrortermin(3)capturesotherdeterminantsofimmigrants’relativewages.Therearetwo

broadreasonstoexpectthatitwillbecorrelatedwithimmigrants’relativehours,whichwilllead

estimatesofgtobebiased.Areaswithahighrelativedemandforsomeimmigrantsubgroup

wouldtendtosimultaneouslyhavehighrelativewagesandhoursfortheworkersinthisgroup,

therebygeneratingapositivecorrelationbetweentheerrortermandtheexplanatoryvariableand

12Thisusesthefactthat N

ictFgict

Fgict wwww lnlnln .

13Inparticular,thosewithhighschoolorlessaredividedintohighschoolcompletersandhighschooldropouts,andthosewithsomecollegeormorewillbedividedintothosewithandwithoutfouryeardegrees.Withinthesecells,workersarefurtherdividedintofive‐yearpotentialexperiencebandsupto40.Themeanofnativelogwagesarecomputedweightedbyp/(1‐p),wherepisthefractionofeachdetailededucationxexperiencexmetropolitanareaxyearcellthataregroupgimmigrants,amonggroupgimmigrantsandnativesinthatcell.(ThisweightisinteractedwiththeACSorCensussampleweight.)Cellswithnonativesornogroupgimmigrantsaredropped.

leadingtoslopeestimateslessnegative.14Astandardwaytoaddressthisistousepredictable

variationinthesizeofimmigrantinflowsbasedonthelabormarketsinwhichimmigrantsfrom

differentpartsoftheworldtendtocluster(MexicansinLA,RussiansinNewYork,etc.)This

approachisdescribedintheAppendix.Inpractice,ittendstoproducesimilarresultstothe

ordinaryleastsquaresestimatesthatarepresentedbelow,suggestingthatthistypeofbiasmaynot

belarge.Inaddition,insectionIV.C.,Iwillpresentestimatesof(2)thatrelyonlyonaggregate

variation‐‐thatis,acrosseducationxexperiencegroups,similartoOP‐‐ratherthanvariation

acrosslabormarkets.Thisalsoproducessimilar,iflessprecise,estimates.

(3)isalsolikelytobebiasedbecauseimmigrantswithpoorEnglishlanguageskillstendtobe

dissimilarfromU.S.nativesinotherwayswhichaffecttheirsubstitutabilitywithnatives.For

example,thelargestgroupofimmigrantswithpoorEnglishskillsisMexicans,manyofwhomreside

intheU.S.illegally.TheirlegalstatusmayconfineMexicanstoparticularoccupations,makingit

harderforthemtocompeteheadtoheadwithnatives.Ifso,immigrantrelativehoursmaybemore

negativelycorrelatedwithlow‐thanhigh‐Englishimmigrants’relativewages,but(atbest)only

partlybecauseoftheobserveddifferenceEnglishskills.Intheabsenceofaperfectwaytoidentify

immigrantswhodifferonlyinEnglishskillsandnototherfactors(legalstatusinparticularisnot

observable),theapproachItakeistoexaminevariationacrossdifferentimmigrantsubgroups,such

asbyageatarrival.AlthoughthevariationinEnglishskillsacrossthesesubgroupsisalsolikelyto

alsobecorrelatedwithdifferencesinotherfactorswhichaffectimmigrant‐nativesubstitutability,

thehopeisthattherelationshipisnotasstrongoratleastnotassystematicacrosstheseother

subgroups.Forexample,thehopeisthatage‐at‐arrivaldoesnothavea“kinked”relationshipwith

legalstatuslikeithaswithEnglishskills.(SeeFigure1b.)Thisapproachislikelytobeonlypartially

14Theseestimatesarealsowell‐identifiedonlyifthegeographicunitsinvolvedactasclosedeconomies.U.S.evidencesuggeststhatlocallabormarketsbehavelikeclosedeconomiesinthesensethatimmigrantsdonotappearto“displace”native‐bornworkerswiththesameskills(e.g.,CardandDiNardo,2000)nordotheyhavemuchimpactonindustrymix(Lewis,2004).

successful,sotheestimatesarestilllikelytostillbebiased,probablytowardsfindingthatlanguage

skillsareimportant.

III.B. Data

Datafortheregressionanalysiscomefromthe2000CensusofPopulationand2007,2008,and

2009CommunitySurveys.Thelatterthree(whicharefromRugglesetal.,2010)arecombinedinto

whatwillbereferredtoas“2008”data.Informationonhoursworkedandhourlywageswere

aggregatedtothemetropolitanareabyyearbybroadeducationgroup,asdescribedabove.

Includedinthecalculationofworkers’hourswereworkersage16to65,withpositivepotential

experience(oldenoughtobeoutofschoolgivenanormalprogressionthroughschool),livingin

oneofthe136metropolitanareasinthesample.15Thewagesampleisthesubsampleofthese

workerswhoarecurrentlyemployedwithpositivewageandsalaryearningsandzerofarmor

businessearningsinthepastyear.16Metropolitanareasweredefinedconsistentlyusing“PUMAs”

and1990metropolitanareaboundaries.

Table4presentsthe(unweighted)meansandstandarddeviationsofthesedata.Therelativelog

hoursofimmigrantsintheaverageareaisnegativebothoverallandbyeducationlevel,whichsays

immigrantsareonaverageaminorityofworkers;inthemeaneducation‐metro‐yearobservation

immigrants’hoursrepresentabout14.4percent(=e‐1.934x100)ofnatives’hours.Thereisalotof

variationacrossthesemetroareasintherelativehoursofimmigrants:thestandarddeviationis

around1,whichwillbeusefulforinterpretingthemagnitudeoftheregressionestimatesbelow.

Thetablealsoshowstheimmigrant‐nativewagegapisaround12.5percentintheaverage

metropolitanarea,andismuchlargerforlow‐Englishimmigrants,eventheonesmatchedto 15Also,thoselivingingroupquarterswereexcludedfromtheanalysis.16Tobeincludedinthewagesample,native‐bornworkersalsowererequiredtoreportspeakingEnglish“only”or“verywell.”Hourlywagesabove$200andbelow$2in1999dollarswerereplacedwiththesethresholds.

nativeswithsimilareducationandexperience(asthesegapsarecalculatedtodo).Thereisalotof

variationintheimmigrant‐nativewagegapacrossmetroareastobeexplained,whichIwillnow

trytodo.

IV. Results

IV.A. BasicU.S.Evidence

Table5presentsestimatesof(3).PanelAexaminestherelativewagesofallimmigrants.The‐0.04

estimateincolumn(1)saysthataoneunitincreaseinimmigrants’relativehoursisassociatedwith

a4percentdeclineinthewagesofimmigrantsrelativetonatives.Althoughaoneunitincreasein

theindependentvariablemeansapproximatelytriplingimmigrants’laborsupply,whichsounds

likealot,itisactuallyareasonablechangetoexamineasitisbothastandarddeviation(Table4)

androughlyequaltotheincreaseinthisvariablesince1990intheaveragemetropolitanarea.17In

anycase,the‐0.04responseissimilarinmagnitudetopreviousestimatesofthisrelationship,such

asOPorCard(2009).

PanelBofTable5producesseparateestimatesforthewagesofimmigrantswhoreportstrong

Englishlanguageskills‐‐immigrantswhosaytheyspeakEnglish“only,”“verywell,”or“well”‐‐and

whoreportpoorEnglishlanguageskills‐‐immigrantswhosaytheyspeakEnglish“notwell”or“not

atall.”Asexpected,therelativewagesofimmigrantswithpoorEnglisharemorenegatively

associatedtherelativepresenceofimmigrantlabor:theirwagesdecline5.7percentforaoneunit

increaseintheindependentvariable,comparedto2.2percentdeclineforimmigrantswithstronger

English.Thedifferencebetweenthetwocoefficientsisstatisticallysignificantattheonepercent

level,shownasthep‐valuelessthan0.01intherowbeneaththeseestimates.

17Intheaveragemetroarea‐educationcellinthesample,thisvariablerosefrom‐2.69to‐1.75between1990and2008.

Columns(2)and(3)showestimatesseparatelybybroadeducation.PanelAindicatesthat

educatedimmigrants’wagesaremoreresponsivethanlesseducatedimmigrants’,despitethefact

thateducatedimmigrantstendtoreportsubstantiallybetterEnglishlanguageskills(Table1).This

maynotbeinconsistentwiththeimportanceofEnglish,however;itisplausiblethatlanguageskills

aremoreimportantinjobsthatrequirecollegeeducation,aviewforwhichthereissomeevidence

(Berman,Lang,andSiviner,2003).Inaddition,thedifferenceinthewageresponsesofimmigrants

withpoorandstrongEnglisharesimilarformore‐andless‐educatedimmigrants:inPanelBthe

gapincoefficientsis3.6(=0.047‐0.011)percentagepointsforless‐and3.3(=0.078‐0.045)

percentagepointsformore‐educatedimmigrants.

PanelCbreaksoutestimatesbythemoredetailedEnglishlanguageskillsshowninTables1and2.

Goingtothisdetailrequirestheexaminationofasmallernumberofmetroareas,112,thatarelarge

enoughtoobserveallimmigrantsubgroups.(Inparticular,wageearningcollegegraduateswho

reportnotspeakingEnglishatallarerare.)Thewageresponseismonotonicinself‐reported

Englishlanguageskills,bothoverallandseparatelybyeducation,andthedifferencesacrossEnglish

categoriesarestatisticallysignificant.Interestingly,thereisasignificantnegativeresponseevenin

thetopEnglishcategory,whatIreferredtoas“fluent”above.Whilesomeoftheworkersinthis

categorymaynotbetrulyfluentinEnglish,areasonableinterpretationofthisisthatthereare

factorsbesidesEnglishskillsthatmakeimmigrantsimperfectlysubstitutablewithnatives.

Figure2aexamineshowthewageresponsevariesbyageatarrivalandtimeintheU.S.Itplots

coefficientestimates(andconfidenceintervals)fromestimatesof(3)‐‐thatis,stillusingthesame

variationinimmigrantrelativelaborbybroadeducation,metropolitanarea,andyear‐‐separately

forimmigrantsinthetenyearage‐at‐arrivalcategoriesandfiveyearyearsinU.S.categoriesshown

onthefigure’sx‐axis.PanelAshowsthattheresponseofwagesbyage‐at‐arrivalfollowthesame

“kinked”patternthatself‐reportedEnglishlanguageskillsdidinFigure1a.Whileitispossiblethat

otherunobservedfactorsthataffectimmigrants’substitutabilitywithnativesfollowthiskinked

pattern,thisreinforcesthedirectevidencefromEnglishlanguageskillsinTable5.Ontopofthis,

thekinkedrelationshipintheresponseappearstobelimitedtotheless‐educatedsubsamplewhere

itwasfound(Figures1band2b).ThereisalsoamonotonicrelationshipwithtimeintheU.S.

(Figure2a,panelB).

IV.B. TheEffectsofLanguageSupply

Alloftheregressionspresentedsofarhaveemployedthesameindependentvariable:thenatural

logoftheratioofimmigrants’aggregatehourstonatives’aggregatehours.InthissectionIinstead

employdirectmeasuresofthesuppliesoflanguageskills,includingasthenaturallogofthe

aggregatehoursofthosewhospeakEnglishnotwellornotatall(thosewith“poorEnglish”)to

thosewhospeakEnglishonly,verywell,orwell(thosewith“strongEnglish”).Inaddition,totry

andunderstandwhathappensinmarketswithalargenumbersofSpanishspeakers,Iwilladd

controlsfortherelativehoursofworkerswhospeakSpanishathome.

TheresultsareinTable6.Tokeepthingssimple,thetableexaminesonlyworkerswithahigh

schooleducationorless.Column(1)repeatstheestimatefromPanelAofTable5:itsaysthe

overallimmigrant‐nativelogwagegapdeclines3.4percentfora1unitincreaseinimmigrants’

relativehours.Column(2)replacesthisindependentvariablewiththeonemeasuringtherelative

hoursofthosewithpoorEnglishrelativetostrongEnglish.Thecoefficientisthesametotwo

decimalplaces.ThissupportstheargumentmadeinSectionIIthat,asapracticalmatter,the

relativesupplyofEnglishlanguageskillsmovesone‐for‐onewiththerelativesupplyofimmigrants.

Column(3)repeatstheestimatesofcolumn(2)forthesubgroupofimmigrantswhoreport

speakingSpanishathome.Theestimatedwageresponseisnearlyidenticalforthissubgroup.To

investigateiftheresponsesvarywiththedensityofSpanishspeakersinthemarket,column(4)

addscontrolsfortheaggregatehoursofworkerswhospeakSpanishathomerelativetoworkers

withstrongEnglish.Thismeasureisenteredseparatelyforcollegeandnon‐collegeworkers,

followingtheresultsinTable3.Column(4)presentsweakevidencethatthereisanadditional

depressingeffectofhavingalargenumberofSpanishspeakingnon‐collegeworkersonthewages

ofnon‐collegeSpanishspeakers,inadditiontotheimpacthavingalargenumberofnon‐English

speakers.However,thisisoffsetbythepositivewageimpactofgreaterdensityofcollege‐educated

Spanishspeakingimmigrants.

Agraphicalversionofthecolumn(4)relationshipisshowninFigure3.ItplotsSpanish‐speaking

relativehoursamongworkerswithmorethanahighschooleducationversusthosewithahigh

schooleducationorless–thetwovariablesinthelowerhalfofTable6–in2008data,anddotted

linesindicatethemedianofeachvariable.Thedashedlineisnotthefittedline(althoughitisvery

close);rather,itindicatesthedividinglinebetweenareaswithabove‐andbelowaveragewagesfor

less‐educatedSpanish‐speakingimmigrants(relativetonatives)accordingtotheestimatein

column(4)(ignoringtheimpactoftheothervariable,poor/strongEnglish).18Inareasabovethe

dashedline,lesseducatedSpanish‐speakingimmigrantstendtohaverelativelyhighwages:this

includestwoCubanenclaves,MiamiandJerseyCity,otherareasinFlorida,aswellasareasonthe

Texasborder(notlabeledongraph),andRiversideandLosAngeles.Interestingly,many“new”

immigrantdestinations(Singer,2004)‐‐likeAtlanta,Charlotte,Denver,Greensboro,Portland,and

Raleigh‐‐arebelowtheline,indicatingtheMexican(or,really,anyless‐educatedSpanish‐

speaking)immigrantsthereearnbelowaveragewages.Thisisareversaloftheseareas’position

notsolongago–asimilargraphfor1990wouldshowmostofthesenewdestinationsabovethe

line.Infact,themodelincolumn(4)appliedto1990(CensusofPopulation)datapredictsthat

18Specifically,itisalinewithaslopeof0.7=0.045/0.065–theratioofthetwolowercoefficientsincolumn4–thatgoesthroughthesamplemedianofthetwovariables,whichareshownwiththedottedlinesinthefigure.Theresidualscatterplot,conditioningoutpoor/strongEnglish,isshowninAppendixFigureA1andhasthesamequalitativepatterns.

MexicanimmigrantswouldhaveearnedarelativewagesevenpercenthigherinSinger’snew

destinationsthaninotherlargeareasthatwereherhistoricalimmigrantgateways.19Therelatively

highwagesmayhavebeenpartofwhatattractedMexicanstotheseareasstartinginthe1990s,

althoughotherresearchindicatesfasteremploymentgrowthwastheprimarydraw(Cardand

Lewis,2007).Overthepast20years,thewageadvantageofthesenewareasforMexicanshas

completelyerodedbecausetheSpanishinflowshavebeendisproportionatelyless‐skilled.20

TheestimatesinTable6mightadditionallybeinterpretedasindicatingthatasufficientlyrichskill

distributionofSpanishspeakersallowsaparallel“Spanish‐speaking”labormarkettoemerge

withinanarea.Toprovideadditionalevidenceforthis,column(5)showsanestimateofthesame

relationshipfornon‐Spanishspeakingimmigrantswho,inthisview,shouldnotbeaffectedbythe

densityofSpanishspeakers.ThewageboostfromcollegeeducatedSpanishspeakersisnotpresent

forthem.Alsoincolumn(5)thereisapositivecoefficientontheless‐educatedSpanish/English

hoursratiowhichnearlyoffsetsthecoefficientonpoorEnglish/Englishhours,indicatingthatan

inflowofless‐educatedSpanishspeakershaslittleoveralleffectonthewagesofnon‐Spanish

speakingimmigrants.ThisisconsistentwithSpanishspeakersworkingintheirown,parallellabor

marketwithinthearea.

IV.C. PuertoRico

19WhatIrefertoas“new”immigrantdestinationsintheSinger(2004)typographyincludeherthreecategoriesof“emerging,”“re‐emerging,”and“pre‐emerging.”Thepredictedvaluesarecomputedusingallthreevariablesincolumn(4).Anothermajorfactorinthewagedeterminationoflesseducatedworkersistheratioofcollegetonon‐collegeworkersinalabormarket(e.g.,Card,2009),butonthismeasure,newandolddestinationswereverysimilarin1990.TheactualaveragewageofSpanishspeakingimmigrantswas13percenthigherinnewthanolddestinationsin1990.20ThepatternsovertimearesimilarfornewrelativetotraditionalMexicandestinations.Idefinedas“traditional”Mexicandestinationsthetop20areasrankedonnumberofworkingageMexicansin1990.DrawingonCardandLewis(2007),Idefined15“new”MexicandestinationswithalargeresidualinflowrateofMexicansbetween1990and2008overwhatispredictedfromalinearregressionon1990Mexican(working‐agepopulation)share,andwhicharenottraditionalMexicandestinations.ThelargeareasamongthelatterareallnewdestinationsaccordingtotheSinger(2004)typography.EstimatesinTable6implythatMexicanswouldhaveearned3.5percentmoreinnewthanintraditionaldestinationsin1990,butby2008theywouldhaveearnedonepercentless.

AnotherreasontoexpectthataSpanish‐speakinglabormarketemergeswithasufficientdensityof

Spanishspeakers,isthatitmustinthelimitwhereeveryonespeaksSpanish.TheU.S.containsone

labormarketwherealmostallimmigrantsandnativesspeakSpanish:PuertoRico.21Accordingto

theviewthatlanguageskillsdriveimperfectsubstitutabilitywithnatives,PuertoRicanimmigrants

shouldbeperfectsubstitutesforPuertoRicannatives:theirrelativewagesshouldnotrespondat

alltoimmigrants’relativelaborsupply.Theapproachofexaminingamarketwhereimmigrants

andnativessharealanguagewaspreviouslytakenbyCastillo,GillessandRaphael(2009)(CGR),

whoexaminedCostaRica.

SincePuertoRicoisasinglelabormarket,theanalysiscannotexploitgeographicvariationinthe

sizeoftheimmigrantpopulation.Instead,IfollowtheapproachofCGRandOPandusevariation

overtimeandacrosseducation‐experiencecells,tobedetailedbelow,inthesizerelativesizeofthe

immigrantworkforce.

ThatPuertoRicohasanon‐trivialamountofimmigrationmaynotbewellknown.Figure4shows

theshareoftheworkingagepopulationthatwasbornoutsidePuertoRico–whatIdefineas

“immigrants”forthisanalysis‐‐between1970andthepresent,brokenoutseparatelybythefive

educationcategories‐‐fouryearscollege,1‐3yearscollege,highschoolcompletion,1‐3yearshigh

school,nohighschool‐‐usedintheanalysis.ItisbasedondatafromPuertoRicanpopulation

censuses,whicharetakeninparalleltotheU.S.Census,andthe2007‐9PuertoRicanCommunity

Surveys(Rugglesetal.,2010).MostofthosebornoutsidePuertoRicoarenottrulyimmigrantsbut

areotherU.S.citizens,mostlyofPuertoRicanheritage,whowereborninthecontinentalU.S.

Figure4showsuntilrecently,about15percentofcollegeeducatedworkerscamefromoutside

PuertoRico.Theless‐educated“immigrant”shareislowerbut,untilrecently,hadbeenrising.

21PuertoRicowasnotincludedintheearlieranalysis.In1990,whichisthelastyearthequestionwasasked,97percentofthosebornoutsideand99percentofthoseborninPuertoRicoindicatedthattheyspokeSpanish.Notethatthisisabroaderlanguagemeasurethanwasusedinthepreviousanalysis,whichonlyindicatedwhetherornottherespondentspokeSpanish“athome.”

TheanalysiswillexploitvariationacrossthecellsinFigure4,and,withinthese,acrossyearsof

potentialexperience,groupedintofiveyearcellsupto40.Usualweeklyhoursworkedisnot

availableinthe1970Census,sohourlywagesandaggregatehoursworkedwillbereplacedwith

weeklywagesandweeksworked.Inparticular,theestimationequationis:

(4) iktN

iktitktikNikt

Fikt WWWWww lnln

where Nikt

Fikt WWWWln representstheaggregaterelativeweeksworkedlastyearbynon‐Puerto

Ricanbornworkerswitheducationiandpotentialworkexperiencek.Estimatesof(4)controlfor

anexhaustivesetofeducationxexperience,experiencexyear,andeducationxyeardummies.22

Forcomparison,(4)willalsobeestimatedusingdataonthecontinentalU.S.,whichwillalsoserve

asanadditionalcheckonthecross‐cityresultspresentedabove.23

ResultsarepresentedinTable7,withPanelAforPuertoRicoandPanelBfortheContinentalU.S.

Column(4)showsanegativeandmarginallysignificantcoefficientof‐0.033,fortheU.S.,whichis

surprisinglysimilartotheestimatesinTable5giventhelargedifferenceinmethodology.The

estimateforPuertoRicoisnotzero,butpositiveandsignificant.Alikelyexplanationforthisthat

changesintheweeksworkedpartlyreflectslabordemand,whichmovesweeksworkedandweekly

wagesinthesamedirection.Toaddressthis,Iexploitthefactthatmuchofthevariationinthe

relativesizeoftheimmigrantworkforceinPuertoRicoisdrivenbychangesintherawnumbersof

22Allestimatesof(4)areunweighted,withstandarderrorscomputedtoberobusttoarbitraryerrorcorrelationwithineducationxexperiencecells.InthePuertoRicandata,weeksworkediscomputedforthoseaged16‐65whoarenotlivingingroupquartersandwhoareoldenoughtobeoutofschool.ThePuertoRicanwagesampleconsistsofthoseintheweekssamplewithpositivewageearnings,zerobusinessandfarmearnings,whoarenotcurrentlyenrolledinschoolandwhoreportanoccupation.23TheU.S.samplesaredefinedsimilarlytothePuertoRicanones(seepreviousnote),exceptforafewthings.First,tobeincludedinthewagesample,ratherthanreportinganoccupation,workersneedtoreportbeingcurrentlyemployed.(ThisdifferenceinmethodologyisduetothefactthatemploymentratesareverylowinPuertoRico.)Also,weeklywagesbelow10orabove10,000in1999dollarswereresettothesethresholds.Finally,thetwolowesteducationgroupsarecombinedinU.S.estimates,owingtotheverysmallnumberofnon‐highschooleducatednativesintheU.S.

U.S.‐bornethnicPuertoRicansandPuertoRican‐born.Asthesereflecteducationandfertility

decisionsmadelonginthepast,theyareunlikelytobesystematicallyrelatedtopresentdemand.24

ThesizeofthesetwopopulationsiscomputedusingthecombinationofPuertoRicanandU.S.data,

whichisnecessarybecauseonethirdofthePuertoRicanbornpopulationlivesintheU.S.When

relativeweeksworkedisreplacedbytherelativepopulationsize,incolumn(2),thecoefficientis

indeednonpositiveandisclosetozero.Column(3)showsthatthisvariablemovesalmostexactly

one‐for‐onewiththeweeksworkedvariable,arelationshipthatishighlysignificant.25

Therelationshipincolumn(2)isunfortunatelyverynoisy,andFigure5showswhy.Itshowsa

scatterplotunderlyingtherelationshipincolumn(2),aswellastheU.S.relationshipincolumn(4).

ThePuertoRicanwageestimatesaremuchnoisier,asshownbythelargemeansquarederror

(“vertical”variationaroundtheline)inthePuertoRicanfigurecomparedtotheU.S.,owingtothe

muchsmallernumberofobservationsinthePuertoRicandata.

TheremainingcolumnsofTable7examineseparatelytherelativewageresponse(inthe

continentalU.S.)ofimmigrantswithpoorandstrongEnglish,measuredinthesamewayasinPanel

BofTable5.26Thismeasureisnotavailableuntil1980,andsocolumn(5)showestimates

excluding1970,whicharesmallerinmagnitudeandlessprecise.BrokenoutseparatelybyEnglish

skills,incolumns(6)and(7),thenegativeresponseislimitedtoimmigrantswithpoorEnglish.

Thoughtheseestimatesarenotprecise,theyaresimilarinmagnitudetothedifferenceinresponse

betweenhigh‐andlow‐EnglishimmigrantsthatwasfoundinTable5,around3percentagepoints.

24AlthoughdemandconditionsinPuertoRicomayinfluencetheeducationalattainmentofthePuerto‐Ricanbornpopulation,thisinfluencemaybelimitedsinceasubstantialfraction(aboutonethird)ofPuertoRicansendupinthecontinentalU.S.labormarket.25Thisimpliesthataninstrumentalvariablesestimateoftheeffectofrelativeweeksworksonrelativeweeklywages,usingthepopulationvariableasaninstrument,wouldhavethesamecoefficientasappearsincolumn(2).26Thesecolumnsexcludenative‐bornworkerswhodonotreportspeakingEnglish“only”or“verywell.”

V. ImplicationsforPoverty

Whatcanwesayabouttheeffectsofimmigrationonpovertyinlightoftheseestimates?Afull

answertothisquestionrequiresestimatesoftheeffectofimmigrationonabroadersetofwage

outcomesthanwerestudiedinthischapter,butareexploredinotherresearch(Raphaeland

Smolensky,2008,2009).Chapter2explainsthisingreaterdetail,buttosimplify,themainthing

thepresentestimatesomitistheeffectimmigrationhasonwagesbyshiftingtheratioofnon‐

collegetocollegelabor.However,Card(2009)showsthisissmall(becausetheratioisrecently

similarforrecentimmigrantandnativeworkers).Ontopofthesepreviouslyestimatedeffects,the

estimatesinthischapterimplythatimmigrationhasalargerimpactonthewagesofimmigrants

withpoorEnglishlanguageskills,alreadyahighpovertygroup(Table2),anddependingon

immigrants’mixoflanguageskills,onSpanish‐speakers.

Furthermore,thewageresponsesofthesegroupscanberoughlytranslatedintoaneffecton

povertyrates,assumingallimmigrants’wagesareshifteddownbytheamountimpliedbythe

estimates.TheestimatesinbothTable7andTable5areconsistentwithaoneunitincreaseinthe

relativesupplyofimmigrantlabor‐‐again,roughlyequaltotheincreasesince1990‐‐loweringthe

wagesofimmigrantworkerswithpoorEnglishby3percentagepointsmorethanimmigrantswith

strongEnglish.Theresultingthreepercentdeclineinwages,assumingallimmigrants’incomeis

fromwages(whichisclosetotrue)would,withoutchanginghoursworked,beexpectedtodropthe

low‐Englishimmigrantsbetween100and103percentofthepovertylineintopoverty.In2008,

thisrepresentedaboutonepercentoflow‐Englishless‐educatedimmigrants.Ifyoualsoconsider

thefactthatthedeclineinwagesmightinducesomeimmigrantstoworkless,areasonable

approximationistodoublethisestimate.27Inshort,theriseinimmigrationsince1990mighthave

27Thiscomesfromassumingalaborsupplyelasticityofone(followingRaphaelandSmolensky,2009);thatistosay,thatathreepercentdeclineinhourlywagesisassociatedwithathreepercentdeclineinhoursworked,foratotalofasixpercentreductioninannuallaborincome.

addedonetotwopercentagepointstothepovertyrateofimmigrantswithpoorEnglish(compared

toimmigrantswithstrongEnglish).Usingtheestimatesincolumn(4)ofTable6,thechangeinthe

supplyofSpanish,English,andotherhoursbetween1990and2008isexpectedtohavelowered

thewagesofSpanishspeakingimmigrantsbyroughly6percent(relativetonatives),which

translatessimilarlyintoanincreaseintheirpovertyratesofSpanish‐speakingimmigrantsof

roughly2to4percentagepoints.28Inpractice,povertyratesamongless‐educatedimmigrants

declinedsince1990:from35to30percentamongnon‐Englishspeakersandfrom25to22percent

amongSpanishspeakers.Theestimatesinthispaperareconsistentwiththelargeimmigrantinflux

since1990attenuatingthisdecline.

VI. Conclusions

Onbalance,theestimatesinthispapersuggestthatwhileimmigrants’imperfectEnglishlanguage

skillsmaynotbetheonlyreasonthattheyareimperfectsubstitutesfornative‐bornworkersinthe

U.S.,theyareamajorreasonforthis.UsingseveraldifferentapproachesandsamplesIhavefound

thatthewagesofimmigrantswithpoorEnglishlanguageskillstendtorespondmorenegativelyto

agreaterpresenceofimmigrantsthandothewagesofimmigrantswithstrongEnglishlanguage

skills.Abottomlineisthat,atleastamongless‐educatedimmigrants,immigrationsince1990

mighthavepushedupthepovertyratesofimmigrantswithpoorEnglishbyonetotwopercentage

points(relativetoimmigrantswithstrongEnglish)andofSpanish‐speakingimmigrantbytwoto

fourpercentagepoints(relativetonatives).Theseimpactsareoverwhelmedbyadownwardtrend

inimmigrantpovertyrates,andaresmallerforSpanish‐speakingimmigrantsinmarketswhere

Spanishisprevalentinthecollege‐educatedworkforce.Theseimpactsmayalsohelpaccountfor

28Between1990and2008,ln(poor/strongEnglishhours)rose1.39,andln(Spanish/Englishhours)amongnon‐collegerose1.16andamongcollegeeducatedworkersrose0.58,fora‐0.061=‐0.033*1.39‐0.045*1.16+0.065*0.57changeintherelativelnwage,usingthecoefficientsfromTable6.

thenewspreadofMexicanimmigrantsto“new”immigrantdestinationsstartinginthe1990s,as

thelackoflabormarketcompetitionfromfellowSpanishspeakersinthosemarkets,comparedto

traditionalMexicandestinations,wouldhavemadethemarelativelyattractiveplacetosettle.29

29Chapter5includesadditionalanalysisofwhypovertyrateswerelowerin“new”immigrantdestinations.

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Cutler,DavidM.,EdwardL.Glaeser,andJacobL.Vigdor.“WhenAreGhettosBad?LessonsfromImmigrantSegregationintheUnitedStates.”JournalofUrbanEconomics63(3):759‐74.

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0‐9 10‐19 20‐29 30‐39 40‐49 50‐59AgeatArrivalinU.S.

Only,VeryWell,orWell

OnlyorVeryWell

A.AgeatArrival

0‐4 5‐9 10‐1415‐1920‐2425‐2930‐40 40+YearsinU.S.

B.YearsinU.S.

DataSource:Combined2007,2008,and2009AmericanCommunitySurveys(Rugglesetal.,2010).Samplelimitedtoworkingageforeign‐bornlivingin136largemetropolitanareasandnotingroupquarters.

AllEducationLevels

Figure1a.ShareofImmigrantsWhoSpeakEnglish,byAgeAtArrivalandYearsinU.S.,2007‐9

Only,VeryWell,orWell

OnlyorVeryWell

A.HighSchoolorLess

B.MorethanHighSchool

DataSource:Combined2007,2008,and2009AmericanCommunitySurveys(Rugglesetal.,2010).Samplelimitedtoworkingageforeign‐bornlivingin136largemetropolitanareasandnotingroupquarters.

Figure1b.ShareofImmigrantsWhoSpeakEnglish,byAgeAtArrivalandBroadEducation,2007‐9

‐.15

‐.1‐.05

SlopeEstimate

95%ConfidenceInterval

A.AgeatArrival

‐.15

‐.1‐.05

0‐4 5‐9 10‐1415‐1920‐2425‐2930‐40 40+YearsinU.S.

B.YearsinU.S.

DataSource:2007,2008,and2009AmericanCommunitySurveys(Rugglesetal.,2010)and2000CensusofPopulation.SeenotestoTable5fordetailsofdataconstructionandestimation.

AllEducationLevels

Figure2a.ResponseofImmigrantRelativeWagestoRelativeSupply,byAgeAtArrivalandYearsinU.S.,2000and2008

‐.2‐.15

‐.1‐.05

SlopeEstimate

95%ConfidenceInterval

A.HighSchoolorLess

‐.2‐.15

‐.1‐.05

B.MorethanHighSchool

DataSource:2007,2008,and2009AmericanCommunitySurveys(Rugglesetal.,2010)and2000CensusofPopulation.SeenotestoTable5fordetailsofdataconstructionandestimation.

Figure2b.ResponseofImmigrantRelativeWagestoRelativeSupply,byAgeAtArrivalandBroadEducation,2000and2008

BuffaloSt.LouisCleveland

Baltimore

Detroit

Minneapolis

Philadelphia Milwaukee

CharlotteGreensboro‐Winston‐Salem

Seattle

Boston Atlanta

SaltLakeCity

Portland,OR

Nassau‐Suffolk

Raleigh‐Durham

WashingtonDCSacramento

FortLauderdale

Middlesex

WestPalmBeach

Orlando

Newark

Denver

Bergen‐Passaic

FortWorth

LasVegasChicago

NewYork

Oakland

Phoenix

SanDiego

SanFrancisco

Austin

Houston

Riverside

Dallas

SanJose

JerseyCity

Anaheim

LosAngeles

‐5‐4

‐3‐2

AmongWorkersWithMorethanHS

‐4 ‐3 ‐2 ‐1 0AmongWorkerswithHSorless

DataSource:2007‐9AmericanCommunitySurveys.Dottedlinesaremedians.PointsaboveslopedlinehaveaboveaveragewagesforSpanish‐speakingimmigrants,relativetonatives,accordingtoestimatesinTable6,column4.

Figure3.ln(Spanish/English)Hours,2008:morethanhighschoolvs.highschoolorless

1‐3yrsHS

HSDegree

1‐3yrsColl

4+yrscoll

1970 1980 1990 2000 2010

Datasource:1970‐2000U.S.Censuses,andcombined2007‐9PuertoRicanCommunitySurveys(Rugglesetal.,2010).Samplelimitedtopopulationaged16‐65,notlivingingroupquartersandoldenoughtobeoutofinschoolwithnormalprogression.

Figure4.Non‐PuertoRicanbornshareofPuertoRicanpopulation,byeducationandyear

SmHS,0

CGRD,0

NoHS,5

SmHS,5

CGRD,5NoHS,10

SmHS,10

SmC,10

CGRD,10NoHS,15

SmHS,15

SmC,15

CGRD,15

NoHS,20

SmHS,20

SmC,20

CGRD,20

NoHS,25

SmHS,25

SmC,25

CGRD,25

NoHS,30

SmHS,30

SmC,30

CGRD,30

NoHS,35

SmHS,35

SmC,35

CGRD,35

NoHS,40

SmHS,40

SmC,40

CGRD,40

NoHS,0

SmHS,0

HS,0SmC,0

CGRD,0

NoHS,5

SmHS,5

HS,5SmC,5

CGRD,5

NoHS,10

SmHS,10HS,10SmC,10

CGRD,10

NoHS,15

SmHS,15

SmC,15

CGRD,15

NoHS,20

SmHS,20

SmC,20

CGRD,20

NoHS,25

SmHS,25

SmC,25

CGRD,25

NoHS,30

SmHS,30

SmC,30

CGRD,30

NoHS,35

SmHS,35

SmC,35

CGRD,35

NoHS,40

SmHS,40

SmC,40

CGRD,40

NoHS,0

SmHS,0

CGRD,0

NoHS,5

SmHS,5

HS,5SmC,5

CGRD,5

NoHS,10

SmHS,10

SmC,10

CGRD,10

NoHS,15

SmHS,15

SmC,15

CGRD,15NoHS,20

SmHS,20

SmC,20

CGRD,20

NoHS,25SmHS,25

SmC,25

CGRD,25

NoHS,30

SmHS,30

SmC,30

CGRD,30NoHS,35

SmHS,35

SmC,35

CGRD,35NoHS,40

SmHS,40

SmC,40

CGRD,40

NoHS,0

SmHS,0

CGRD,0

NoHS,5

SmHS,5

CGRD,5

NoHS,10

SmHS,10

SmC,10

CGRD,10

NoHS,15SmHS,15

SmC,15

CGRD,15

NoHS,20

SmHS,20

SmC,20CGRD,20

NoHS,25

SmHS,25HS,25

SmC,25

CGRD,25

NoHS,30

SmHS,30HS,30

SmC,30

CGRD,30

NoHS,35SmHS,35

SmC,35CGRD,35

NoHS,40

SmHS,40 HS,40

SmC,40

CGRD,40

NoHS,0

SmHS,0

CGRD,0

NoHS,5

SmHS,5

CGRD,5NoHS,10

SmHS,10

SmC,10

CGRD,10NoHS,15

SmHS,15

HS,15SmC,15

CGRD,15

NoHS,20 SmHS,20

SmC,20

CGRD,20

NoHS,25

SmHS,25

SmC,25CGRD,25

NoHS,30

SmHS,30

HS,30 SmC,30

CGRD,30NoHS,35

SmHS,35

HS,35SmC,35

CGRD,35

NoHS,40

SmHS,40

SmC,40

CGRD,40

SlopeCoef(se)=‐.002(.126)

NoHS‐<9yrsedSmHS‐9‐11yrsedHS‐12yrsedSmC‐13‐15yrsedCGRD‐>=16yrsed

‐.4‐.2

.4Residualln(Imm/NativeWeeklyWage)

‐.4 ‐.2 0 .2 .4 .6Residualln(PREthnics/PRNatives)

A.PuertoRico

CGRD,0

HSDO,5HS,5

CGRD,5

HSDO,10HS,10

SmC,10CGRD,10

HSDO,15HS,15

SmC,15CGRD,15

HSDO,20

SmC,20

CGRD,20

HSDO,25HS,25SmC,25

CGRD,25

HSDO,30

SmC,30

CGRD,30

HSDO,35 HS,35SmC,35

CGRD,35HSDO,40

SmC,40

CGRD,40

HSDO,0HS,0

SmC,0CGRD,0

HSDO,5

HS,5 SmC,5

CGRD,5

HSDO,10

HS,10SmC,10 CGRD,10

HSDO,15HS,15

SmC,15CGRD,15HSDO,20 HS,20SmC,20 CGRD,20

HSDO,25HS,25

SmC,25

CGRD,25HSDO,30

HS,30SmC,30CGRD,30

HSDO,35HS,35

SmC,35

CGRD,35

HSDO,40

HS,40SmC,40CGRD,40

HSDO,0HS,0

CGRD,0

HSDO,5

HS,5SmC,5

CGRD,5

HSDO,10

HS,10SmC,10

CGRD,10HSDO,15

HS,15SmC,15CGRD,15

HSDO,20

SmC,20CGRD,20HSDO,25HS,25

SmC,25

CGRD,25

HSDO,30

HS,30SmC,30

CGRD,30HSDO,35

SmC,35

CGRD,35HSDO,40

SmC,40

CGRD,40HS,0SmC,0

CGRD,0

HSDO,5

HS,5SmC,5

CGRD,5

HSDO,10HS,10

SmC,10

CGRD,10

HSDO,15HS,15

SmC,15

CGRD,15

HSDO,20

SmC,20

CGRD,20

HSDO,25HS,25SmC,25

CGRD,25HSDO,30

HS,30SmC,30

CGRD,30

HSDO,35HS,35

SmC,35CGRD,35

HSDO,40

SmC,40CGRD,40

CGRD,0HSDO,5

HS,5SmC,5

CGRD,5HSDO,10

SmC,10

CGRD,10

HSDO,15

SmC,15

CGRD,15

HSDO,20

HS,20SmC,20

CGRD,20

HSDO,25HS,25

SmC,25

CGRD,25

HSDO,30

SmC,30

CGRD,30HS,35

SmC,35

CGRD,35

SmC,40 CGRD,40

SlopeCoef(se)=‐.033(.017)

HSDO‐<12yrsedHS‐12yrsedSmC‐13‐15yrsedCGRD‐>=16yrsed‐.2

‐.10

‐.3 ‐.2 ‐.1 0 .1 .2 .3Residualln(Imm/NativeWksWorked)

B.UnitedStates

Note:Scalesofthetwographsare(roughly)proportional.Labelsidentifyeducationxfiveyearexperiencescells.Thex‐variableinPanelAistheresidualln(ethnicPuertoRicanUS‐born/PuertoRican‐bornpopulation).(Aoneunitincreaseinthisvariableisassociatedwithaoneunitincreaseintherelativeweeksworkedofnon‐Puerto‐Ricanbornworkers‐‐seeTable7).Allvariablesareresidualsfromaregressiononanexhaustivesetofeducationxyear,experiencexyear,andeducationxexperiencedummies.RawdatasourcesareU.S.andPuertoRicanPopulationCensuses,andAmericanandPuertoRicanCommunitySurveys(Rugglesetal.,2010).Seetextfordetails.

Figure5.Responseofimmigrantrelativeweeklywagetoimmigrantrelativesupply:U.S.andPuertoRico

Subgroup:

Education Level: All Educ.

Levels

High School

or Less

More than

High School

All Educ.

Levels

High School

or Less

More than

High School

(1) (2) (3) (4) (5) (6)

Foreign‐Born, Share Speaks English…

Only/Very Well 0.464 0.278 0.679 0.261 0.177 0.516

Well 0.221 0.227 0.214 0.234 0.227 0.257

Not Well 0.211 0.318 0.088 0.317 0.365 0.173

Not At All 0.104 0.178 0.019 0.188 0.232 0.054

Native‐Born, Share Speaks English…

Only/Very Well 0.983 0.971 0.990 0.820 0.764 0.879

Well 0.011 0.017 0.007 0.113 0.139 0.086

Not Well 0.005 0.009 0.003 0.054 0.074 0.033

Not At All 0.001 0.003 0.000 0.013 0.023 0.002

B. Speaks Spanish At Home

Data Source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et al. 2010). Sample limited to working‐age

population (age 16‐65 with positive years of potential work experience) residing in 136 large metropolitan areas and not in group

quarters. Panel B is further restricted to those who report speaking Spanish at home. Sample weights used to construct shares.

Table 1. Distribution Across English Speaking Categories, by Nativity, Education and Home Language

A. All Working Age

Outcome:

Education Level: All Educ.

Levels

High School

or Less

More than

High School

All Educ.

Levels

High School

or Less

More than

High School

(1) (2) (3) (4) (5) (6)

All Native‐Born 2.25 1.94 2.39 0.10 0.16 0.06

All Foreign‐Born 2.05 1.76 2.35 0.15 0.20 0.08Foreign‐Born Who Speak English:

Only/Very Well 2.31 1.91 2.46 0.09 0.14 0.06

Well 1.99 1.83 2.19 0.13 0.16 0.10

Not Well 1.70 1.67 1.87 0.21 0.22 0.17

Not at All 1.55 1.54 1.71 0.29 0.30 0.23

All FB Spanish Speakers 1.80 1.70 2.07 0.19 0.22 0.11 Speaks no English 1.54 1.53 1.66 0.30 0.30 0.24

B. Share of Group in PovertyA. Mean ln(hourly Wage), 1999$

Table 2. Mean ln Wages and Poverty Rates By Nativity, Education, and Language Skills, 2008

Data Source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et al. 2010). In Panel B, sample is limited to working‐

age population (age 16 ‐ 65 and old enough to be out of school, given normal progression) residing in 136 large metropolitan areas and not in

group quarters. In Panel A, sample is limited to respondents from the Panel B sample that are currently employed and that had positive

hours worked, positive wage and salary earnings, and zero self‐employment and farm earnings in the past year. Wages are adjusted to 1999

dollars using the consumer price index, and wages exceeding 200 dollars and less than 2 dollars in 1999 dollars are replaced with these

thresholds.

Foreign‐Born

Native Born

Foreign‐Born who Speak Spanish At Home

Dependent Variable:

Subgroup:

(1) (2) (3) (4) (5) (6)

Immigrant ‐0.186 ‐0.041 ‐0.021 0.000 ‐0.003 ‐0.004

(0.009) (0.007) (0.007) (0.013) (0.013) (0.013)

Speaks English:

0.209 0.168 0.149 0.208 0.174

(0.008) (0.009) (0.008) (0.021) (0.019)

Among entire working‐age pop ‐0.212

(0.081)

‐0.306

(0.165)

Sample Size 724,737 724,737 724,737 173,590 173,590 173,590

0.019 0.028 0.189 0.016 0.018 0.018

Other Controls?* No No Yes No No No

ln(Hourly Wage), Workers with HS Education or Less

Table 3: The Role of Language Skills in Immigrant‐Native Wage Gaps.

Spanish Speakers Only

Data Source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et al., 2010). Sample limited to working‐age

respondents (age 16 ‐ 65 with positive years of potential work experience) that have 12 or fewer years of education, that reside one of

136 large metropolitan areas and not in group quarters, that are currently employed, and that had positive hours worked, positive wage

and salary earnings, and zero self‐employment and farm earnings in the past year. Wages exceeding 200 dollars or less than 2 dollars in

1999 dollars are replaced with these thresholds. Standard errors, in parentheses, computed to be robust to arbitrary error correlation

within metropolitan area. *Other controls are a quartic in potential work experience; years of education; years of interacted with

education below 9 years, born after 1950, and both; and dummies for education less than 9 years, born after 1950, female, black,

Hispanic, female*black, and female*hispanic.

Among those with HS or less

Among those with more than HS

Only or Very Well

Only or Very Well x Share of MSA who speak Spanish at home

Mean Standard Mean Standard Mean Standard

Deviation Deviation Deviation

(1) (2) (3) (4) (5) (6)

ln(imm hours/nat hours) ‐1.934 1.019 ‐1.581 1.113 ‐2.288 0.769

Immigrant‐Native Wage Gap

All Immigrants ‐0.125 0.079 ‐0.156 0.072 ‐0.093 0.073

High English Immigrants ‐0.076 0.066 ‐0.088 0.064 ‐0.063 0.065

Low English immigrants ‐0.360 0.201 ‐0.251 0.105 ‐0.469 0.215

Observations

Table 4. Regression Data Descriptive Statistics

272272

Data source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et al ., 2010) and 2000 Census of

Population. Sample for constructing hours worked includes al l those aged 16‐65 who are old enough to be out of school

(given normal progress ion) and res iding in one of the 136 metropol i tan areas in the sample and not in group quarters . To be

in the wage sample requires being in the hours worked sample plus being employed, with pos i tive weeks and hours worked

las t year, nonzero wage and sa lary earnings , and zero bus iness and farm earnings ; for natives i t a lso requires speaking

Engl i sh "only" or "very wel l ." Hourly wages above $200 and below $2 in 1999 dol lars are reset to these thresholds . Data have

been aggregated to 136 metropol i tan areas x two education groups x two years (2000 and "2008," combining the three ACSs).

Table shows unweighted means and standard deviations .

All Education Levels More than High SchoolHigh School or Less

Education Levels: All

High School

or Less

More than

(1) (2) (3)

A. All Immigrants ‐0.040 ‐0.034 ‐0.054

(0.003) (0.004) (0.006)

B. By Broad English Language Skills:

Speaks English Only, ‐0.022 ‐0.011 ‐0.045

Very Well, or Well (0.004) (0.004) (0.006)

Speaks English Not Well ‐0.057 ‐0.047 ‐0.078

or Not At All (0.006) (0.006) (0.016)

P‐value, Equal Coefficients 0.000 0.000 0.030

C. By Detailed English Language Skills (112 MSAs):

Speaks English Only or ‐0.020 ‐0.012 ‐0.036

Very Well (0.004) (0.004) (0.007)

Speaks English Well ‐0.028 ‐0.018 ‐0.047

(0.005) (0.006) (0.011)

(0.006) (0.007) (0.013)

Speaks English Not at All ‐0.083 ‐0.050 ‐0.144

(0.014) (0.008) (0.035)

Data Source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et

al., 2010) and 2000 Census of Population. Table shows coefficient estimates from

regressions of the wage gap between specified immigrants and "similar" natives (see

below) on the natural log of the ratio of aggregate hours worked of immigrants and

natives, using variation across metropolitan areas, year (2000 or "2008") and the two

broad education of columns (2) and (3). All regressions control for year by education

effects. Standard errors, in parentheses, computed to be robust to arbitrary error

correlation within metropolitan area. Sample for constructing mean wages limited to

working‐age respondents (age 16 ‐ 65 and old enough to be out of school given normal

progression) , that reside one of 136 large metropolitan areas (112 in Panel C) and not in

group quarters, that are currently employed, and that had positive hours and weeks

worked, positive wage and salary earnings, and zero business and farm earnings in the

past year; for natives, sample is further limited to those who report speaking English

"only" or "very well." Hourly wages above $200 and below $2 in 1999 dollars were reset

to these thresholds. *The mean ln hourly wage of "similar" natives is computed by

weighting natives to have the same distribution across potential experience (in five year

bands) x education (four groups: high school dropouts, high school, some college, and at

least four years college) cells as the specified group of immigrants in the metropolitan

area and year.

Table 5: Response of the Difference in the Mean ln(Hourly Wage)

of Immigrants and Similar* Natives to Changes in Immigrant

Relative Aggregate Hours Worked

Dependent Variable:

Subgroup of Immigrants: Other

(1) (2) (3) (4) (5)

Ln (Immigrant Hours/ ‐0.034

Native‐Born Hours) (0.004)

‐0.034 ‐0.036 ‐0.033 ‐0.060

Hours) (0.004) (0.007) (0.028) (0.018)

ln(Spanish‐speaking Hours/Strong English Speaking Hours):

‐0.045 0.052

Education or Less (0.035) (0.024)

0.065 ‐0.015

High School Education (0.017) (0.017)

Metro x Year Observations 272 272 272 272 272

0.300 0.298 0.157 0.224 0.110

Data Source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et al., 2010) and 2000 Census of

Population. Wage sample limited to working‐age respondents (age 16 ‐ 65 with and old enough to be out of school, given

normal progression) that have 12 or fewer years of education (or a GED), that reside one of 136 large metropolitan areas and

not in group quarters, that are currently employed, and that had positive hours worked, positive wage and salary earnings,

and zero self‐employment earnings in the past year; for natives it also requires speaking English "only" or "very well." The

dependent variable is the difference in the mean ln hourly wage between the specified group of immigrants and similar

natives, where the mean ln hourly wage of "similar" natives is computed by weighting natives to have the same distribution

across potential experience (in five year bands) x education (high school dropouts or completers) cells as the specified group

of immigrants in the metropolitan area and year. Strong English‐speaking hours worked is the sum of hours worked by those

who report speaking English "Only" "Very Well," or "Well," while poor English‐speaking hours are the sum of hours worked

reported by those who speak English "Not Well" or "Not at All" among working‐age respondents. "Spanish‐speakers" are

respondents who report speaking Spanish at home. All regressions are unweighted and control for year effects. Standard

errors, in parentheses, computed to be robust to arbitrary error correlation within metropolitan area.

All Spanish‐Speaking

ln(Immigrant Wage/Native Wage), High School or Less

Table 6: Immigrants' Relative Wages and Language Supplies, 2000 and 2008

Ln(Poor/Strong English‐Speaking

Among workers with High School

Among workers with More than

Y = ln(for/ Subsample:

nat weeks) Poor English

(1) (2) (3) (4) (5) (6) (7)

ln(Foreign‐born weeks/ 0.150 ‐0.033 ‐0.021 ‐0.002 ‐0.031

Native‐born weeks) (0.061) (0.017) (0.019) (0.020) (0.049)

ln(Cont'l U.S. born ethnic Puerto ‐0.002 1.003

Ricans/Puerto‐Rican born) (0.126) (0.126)

Observations 224 224 224 180 144 144 144

R‐squared 0.489 0.457 0.919 0.935 0.942 0.913 0.976

Table 7: Continental U.S. and Puerto Rico: Aggregate estimates, 1970‐2000

Y=ln(foreign/native

Data Source: 1970, 1980, 1990, and 2000 Puerto Rican Censuses of Population and combined 2007, 2008, and 2009 Puerto Rican Community Surveys

(Panel A) and 1970, 1980, 1990, and 2000 U.S. Censuses of Population and combined 2007, 2008, and 2009 American Community Surveys (Panel B),

al l from Ruggles et al . (2010). Sample for independent variable includes workers age 16‐65 who are old enough to be out of school given

normal progress ion through school and not l i ving in group quarters . The sample used to compute the dependent variable, weekly wages , i s

this sample with the additional requirement of being currently employed (U.S.) or reporting an occupation (Puerto Rico), not enrol led in school ,

and without bus iness or farm income. In U.S. data (columns 4‐7), weekly wages exceeding $10,000 or below $10 in 1999 dol lars were reset at

these thresholds . In columns 5‐7, native‐born workers who did no report speaking Engl i sh "only" or "very wel l" were excluded from the wage

sample. Sample weights used to aggregate variables to the 5‐year experience x education cel l s used in the analys i s (see text). Standard errors

are ca lculated to be robust to arbi trary error correlation within education x experience cel l s .

weekly wage)

A. Puerto Rico B. Continental United States

Excluding 1970

Strong English

Appendix

Toaddressthepossibilitythatahighpresenceofimmigrantsinamarketreflectshighwagesin

thosemarkets‐‐whichwouldtendtobiasthecoefficientsinTables5and6towardszero,Iusean

instrumentalvariableforln(HF/HN)fromCard(2009),whichmeasurestheimmigrantinflowrates

predictedbythearea’slaggedoriginmixofimmigrants.Inparticular,itis:

Fojttoc

wherefoc,t‐2representsatwodecadelaginthefractionofU.S.immigrantsfromregionolivingin

metropolitanareac,whichapportions FojtP ,thenumberofimmigrants(nationally)arrivingfrom

oinskillgroupjinthepastdecade.(TheregionsarelistedinTableA2,alongwith FojtP figures.)

Thenumeratoristhusthepredictednumberofimmigrantarrivalsincelljc.Thisisconvertedtoa

predictedarrivalratebydividingbythearea’sbeginningofdecadepopulation,Pc,t‐1.The

assumptionbehindthisinstrumentisimmigrantspersistinlocatingincertainareasbecausethey

valuebeingnearsimilarimmigrants,andnotbecausetheseareashavepersistentlystrongerwage

growthforthattypeofimmigrant.

Thisinstrumentisastrongpredictorofimmigrants’relativehours.F‐statisticsontheinstrument

inthefirststageareinthe50‐100range.Inaddition,instrumentalvariablesestimatesusingthis

instrumentaresimilartotheOLSestimatespresentedinTable5.ThisisshowninAppendixTable

A3,whichisidenticalinstructuretoTable5butshowsIVestimates.Itshowsthesamepatternof

coefficients,withgreater(magnitude)wageresponsesforimmigrantswithworseEnglishlanguage

skills.ThedifferencesincoefficientsacrossEnglish‐speakingcategoriesaresimilarinmagnitudeto

theOLSestimates,andare,asinOLS,statisticallysignificant.

Seattle

Boston

St.Louis

SanFranciscoMinneapolis

NewYork

Atlanta

Portland,OR

Baltimore

Detroit

SanJose

SacramentoPhiladelphia

Newark

OaklandCharlotte

WestPalmBeach

Cleveland

Greensboro‐Winston‐Salem

Raleigh‐Durham

WashingtonDCChicago

Anaheim

FortLauderdale

Middlesex

Denver

Buffalo

Phoenix

Dallas

LosAngeles

FortWorth

Milwaukee

Bergen‐Passaic

Houston

SaltLakeCity

JerseyCity

SanDiegoLasVegasAustin

Nassau‐Suffolk

TampaRiverside

Orlando

‐1‐.5

AmongWorkersWithMorethanHS

‐1 ‐.5 0 .5 1AmongWorkerswithHSorless

DataSource:2007‐9AmericanCommunitySurveys.Pointsareresidualsofaregressionofln(Spanish/Englishhours)onln(poor/strongEnglishhours),separatelybyeducation(highschoolorlessonthex‐axis,morethanHSonthey‐axis).PointsaboveslopedlinehaveaboveaveragewagesforSpanish‐speakingimmigrants,relativetonatives,(conditionalonln(poor/strongEnglishhours)accordingtoestimatesinTable6,column4.

AppendixFigureA1.Residualln(Spanish/EnglishHours),2008:morethanhighschoolvs.highschoolorless

High School

or Less

More than

High School Area

High School

or Less

More than

High School

Anaheim, CA 0.543 0.118 McAllen, TX 0.928 0.789

Aurora, IL 0.502 0.097 Miami, FL 0.684 0.612

Bakersfield, CA 0.507 0.198 Oxnard‐Ventura, CA 0.528 0.147

Brownsville, TX 0.816 0.670 Riverside, CA 0.505 0.213

El Paso, TX 0.846 0.678 Salinas, CA 0.673 0.193

Jersey City, NJ 0.526 0.270 San Antonio, TX 0.540 0.292

Laredo, TX 0.890 0.818 Santa Barbara, CA 0.589 0.151

Los Angeles, CA 0.633 0.216 Santa Cruz, CA 0.515 0.093

Table A1. Share Speaks Spanish at Home, by Broad Education, Selected Metropolitan Areas

Data source: s tacked 2007, 2008 and 2009 American Community Surveys (ACSs) (Ruggles et al ., 2010). Sample l imited

to working‐age population (age 16‐65 and old enough to be out of school , given a normal progress ion through

school ), and not l i ving in group quarters . Computed us ing ACS sample weights .

Origin Group:

High School

or Less

More than

High School

or Less

More than

High School

(1) (2) (3) (4)

Mexican 1,944,656 292,542 2,618,328 296,963

Central American 517,066 105,261 493,669 92,671

South American 290,534 302,840 333,430 275,063

Caribbean (ex Cuban) 202,625 131,153 331,827 148,237

SE Asian (ex Filipino) 139,257 104,244 288,013 173,567

Chinese 135,836 220,608 158,375 302,729

Russian or E European 133,065 286,665 283,883 385,346

Sub‐Saharan African 129,245 178,315 129,346 173,449

South Asian 123,072 497,999 148,698 430,311

Cuban 89,306 56,648 109,769 56,659

Middle Eastern (ex Israeli) 88,988 165,310 94,684 137,885

Filipino 56,810 229,456 91,406 219,320

Commonwealth 51,432 189,733 74,478 264,485

Korean or Japanese 50,217 220,028 84,669 248,958

Southern European 27,374 46,875 34,168 48,243

Northern European* 9,521 63,872 55,668 169,033

2000‐2008 1990‐2000

Table A2. National Immigrant Arrivals, by Education, Origin, and Decade

* Includes Is rael i s . Data Source: Combined 2007, 2008, 2009 American Community Surveys

(columns (1) and (2), from Ruggles et al ., 2010) and 2000 Census of Population (columns (3) and

(4)). Sample l imited to working age population (age 16‐65 and old enough to be out of school ,

given normal progress ion through school ) and not l i ving in group quarters .

Education Levels: All

High School

or Less

More than

(1) (2) (3)

A. All Immigrants ‐0.035 ‐0.030 ‐0.052

(0.005) (0.006) (0.007)

B. By Broad English Language Skills:

Speaks English Only, ‐0.018 ‐0.010 ‐0.044

Very Well, or Well (0.005) (0.005) (0.006)

or Not At All (0.009) (0.009) (0.016)

C. By Detailed English Language Skills (112 MSAs):

Speaks English Only or ‐0.022 ‐0.018 ‐0.036

Very Well (0.005) (0.005) (0.007)

Speaks English Well ‐0.015 ‐0.005 ‐0.046

(0.007) (0.008) (0.011)

(0.010) (0.011) (0.015)

Speaks English Not at All ‐0.057 ‐0.030 ‐0.137

(0.014) (0.013) (0.029)

Table A3: Instrumental Variables Estimates of the Response of the

Difference in the Mean ln(Hourly Wage) of Immigrants and Similar*

Natives to Changes in Immigrant Relative Aggregate Hours Worked

Data Source: Combined 2007, 2008, and 2009 American Community Surveys (Ruggles et

al., 2010) and 2000 Census of Population. Table shows coefficient estimates from

regressions of the wage gap between specified immigrants and "similar" natives (see

below) on the natural log of the ratio of aggregate hours worked of immigrants and

natives, using variation across metropolitan areas, year (2000 or "2008") and the two

broad education of columns (2) and (3). All regressions control for year by education

effects and are estimated by instrumental variables using the lagged origin mix

instrument described in the appendix. Standard errors, in parentheses, computed to be

robust to arbitrary error correlation within metropolitan area. Sample for constructing

mean wages limited to working‐age respondents (age 16 ‐ 65 and old enough to be out of

school given normal progression), that reside one of 136 large metropolitan areas (112

in Panel C) and not living in group quarters, that are currently employed, and that had

positive hours and weeks worked, positive wage and salary earnings, and zero business

and farm earnings in the past year; for natives, sample is further limited to those who

report speaking English "only" or "very well." Hourly wages above $200 and below $2 in

1999 dollars were reset to these thresholds. *The mean ln hourly wage of "similar"

natives is computed by weighting natives to have the same distribution across potential

experience (in five year bands) x education (four groups: high school dropouts, high

school, some college, and at least four years college) cells as the specified group of

immigrants in the metropolitan area and year.

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