Why are immigrants from some countries more successful than others?

 
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Immigrants, politicians across the spectrum regularly declare, help make America a success. The United States was founded by immigrants and their children on the idea that anyone, regardless of birth, can achieve anything.

But some groups — that is, American immigrants from certain countries — appear more successful than others. Why? The answer, a new paper explains, depends largely on the proportion of an immigrant’s home country population that moves to the U.S.

An academic study worth reading: “Why Are Some Immigrant Groups More Successful than Others?” a working paper from the National Bureau of Economic Research, 2017.

Study summary: Edward Lazear of Stanford University (who is also a former White House economics advisor) looks at five consecutive years (2011-2015) of Census Bureau data to model immigration trends from 129 countries. Variables include educational attainment of the immigrants, wages and income once they are in the U.S., and how many from each country immigrated. He also looks at demographic data for the home countries, such as population, size of the economy and average years of education. Finally, he uses U.S. government data on visas and immigration.

Lazear measures success by immigrants’ earnings, averaged across each group based on the country of origin, and finds a strong correlation between earnings and education.

Because U.S. immigration visas are rationed and the decisions about who is awarded a visa are opaque, Lazear makes several assumptions. Educated people, he believes, find it easier to navigate the process of applying. There are sometimes visas available for highly skilled foreigners, who later find ways to stay on immigrant visas. And he assumes that anyone offered an immigration visa to the U.S. will accept it.

Key takeaways:

  • Countries that supply more immigrants, relative to their size, “tend to supply lower average ability immigrants” (immigrants with less education). “Compare a tiny country like Cape Verde with half a million people to a large country like Nigeria with almost 200 million people. Both have similar average levels of education, but the average level of education among immigrants in the U.S. is 9.8 years for Cape Verde immigrants versus over 15 years for those from Nigeria.”
  • Another example perhaps more clearly demonstrates the intuition: “It is easier to select one million highly educated people from India with 1.3 billion people than it is from Laos with 7 million people. Consequently, immigrants of Indian origin have higher levels of educational attainment than do immigrants of Laotian origin.” (Granted, there are not an equal number of Indians and Laotians emigrating to the U.S., nor are there an equal number of visas available to both.)
  • Mexico, however, is an exception: It is the largest source of immigrants to the U.S. (about 27 percent) and yet Mexican immigrants rank second from last in educational attainment.
  • In any given year, over 60 percent of immigrants receiving permanent residency permits are sponsored by family members. That is not a criterion that favors the most educated; instead, it favors groups that already are represented in the U.S. (such as Mexican-Americans). These family immigrants “may bring the average level of education down [for that group], not because there are so many of them, but because they are selected on family basis, rather than on skill.”
  • The immigrant group with the highest level of educational attainment is from the former Soviet Union — people who left Russia and the other 14 Soviet republics before 1991, when the communist government rarely gave permission to leave. Many of them were highly educated dissidents.
  • The larger the number of immigrants from one country, the lower their wages tend to be in the U.S.

The author considers several confounding factors: Perhaps less-educated people are favored by visa officers, because they are less likely to compete for jobs with higher-skilled Americans, for example. And countries that are geographically closer to the U.S. supply more undocumented migrants.

Helpful resources:

The Department of Homeland Security, which is responsible for immigration, publishes an annual Yearbook of Immigration Statistics (usually about two years later). It also publishes data on lawful permanent residents. The Department of State, which issues visas, publishes data on the immigrant visa waiting list.

Other research:

We have profiled a wide range of research on immigration. We’ve looked at the effects of skilled immigration on U.S. employment and on prices, at the long-run economic benefit of immigrants, on immigrant children and their chances of success, and delved into the ongoing debate about sanctuary cities.

Two 2015 papers in the Journal of Labor Economics may be of interest to journalists writing about skilled immigration: “Attracting Talent: Location Choices of Foreign-Born PhDs in the United States” and “Skilled Immigration and the Employment Structures of U.S. Firms.”

This 2017 paper from the Brookings Institution, a think tank, finds that Mexican immigrants to the U.S. hail largely from middle-income families, not the lowest-income.

This 2014 paper from the Institute of Labor Economics in Germany finds immigrants in the U.S. more likely to own businesses than American-born citizens.

Last updated: July 31, 2017

 

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Citation: Lazear, Edward P. “Why Are Some Immigrant Groups More Successful than Others?” National Bureau of Economic Research working paper 23548, 2017.