Question

Suppose that cohort quality of immigrants is increasing over time, and that return migration is positively selected from the original migrant pool. Explain the two problems this creates for correctly estimating immigrant assimilation.

Answer 1

The positive selection of immigrants and increasing cohort quality of immigrants over time would result in following problems as the result of which the immigrant assimilation could not be correctly estimated. These problems are:

1) Persistence of income inequality. The positively selected immigrants take advantage of the high returns to skill in the country in which they are migrated. Immigrants who gets occupied in the lower-paid occupations than natives upon arrival, did not catch up with natives over a single generation. This prevent assimilation with the natives.

2) Results in lower wages due to flooding of labor market with increased supply of labor. New arrivals of immigrants creates winners and losers in the natives and among existing immigrant workers from the past, thereby encouraging some native born to move away from immigrant dominated cities, thereby furthering difficulty in assimilation of immigrants with the natives.