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The Income Penalty for Immigrants with College Degrees

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Immigrants to the United States have become more educated since the Great Recession. Between 2007 and 2017, the share of recent working-age immigrants who have a four-year college degree rose from 32 percent to 45 percent. Although this trend is a positive development, policymakers should interpret it cautiously. “Educated” is not the same as “skilled”,,

Immigrants to the United States have become more educated since the Great Recession. Between 2007 and 2017, the share of recent working-age immigrants who have a four-year college degree rose from 32 percent to 45 percent. Although this trend is a positive development, policymakers should interpret it cautiously. “Educated” is not the same as “skilled”, and evidence is growing that a college degree is not as meaningful for immigrants as it is for the native-born.

Consider income. The figure bellow compares the average income of recently arrived, college-educated immigrants in their prime working years (ages 25 to 54) with their U.S.-born counterparts who have the same age and education. (“Recently arrived” means within the last 10 years of the survey year. In other words, data from 1980 covers immigrants who arrived between 1970 and 1980; data from 1990 covers immigrants who arrived between 1980 and 1990; and so on.) Because changes in the race and gender composition of the workforce could complicate the trend, only men are included in the analysis below, and the U.S-born comparison group is limited to non-Hispanic whites.

 


Among prime-age men with a four-year college degree, recent immigrants continue to earn less than U.S.-born white Americans.



Source: Decennial Census, 1980-2000; American Community Survey, 2010 and 2017.


The leftmost dark green bar indicates that among prime-age men with a college degree, recently-arrived immigrants in 1980 earned 35 percent less than U.S.-born whites. Moving from left to right, the dark green bars show that the income deficit declined to 25 percent by 2000. Unfortunately, the decline seems to have stalled, and the deficit remained substantial in 2017 at 24 percent. Since recent immigrants with a college degree suffer such a large income penalty, it is unlikely that they are as productive as their U.S.-born counterparts.

One reason for the deficit may be that immigrants struggle to find regular work that matches their education level — perhaps because they are unfamiliar with regulations, networking, and licensing requirements in their new country. Indeed, a recent study by the Center found that 20 percent of college-educated immigrants work in a low-skill occupation, compared to 7 percent of college-educated natives. The light green bars on the figure above show that after controlling for occupational status and time on the job, the income deficit shrank to 13 percent in 2017. A mismatch between education and occupation clearly causes some of the observed deficit.

Nevertheless, recently arrived immigrants with college degrees earn significantly less than college-educated natives even when they work the same hours in similar jobs. Why? One possibility is a lack of bargaining power. Some immigrants are in the country illegally, and others hold temporary visas that restrict their job options.

Another possibility is that college-educated immigrants are less skilled than their native counterparts. The Center published an important study last year showing that foreign-educated immigrants scored far lower on tests of literacy and numeracy than did U.S.-educated immigrants and natives. In that study’s dataset, over three-quarters of recent prime-age immigrants with a college degree earned it before coming to the United States, so it is no surprise that the immigrants analyzed here have lagging incomes. It would be interesting if the decline in the income deficit since 1980 is a result of more immigrants having U.S. degrees, but we lack the historical degree data needed to test that theory.

More research is needed, but the existing data clearly indicate that “educated” is not the same as “skilled”. College graduates are not interchangeable with each other, especially in an immigration context where acculturation affects labor market success. If the United States wishes to recruit skilled immigrants who will be highly productive upon arrival, the selection process needs to consider more than mere educational credentials.

Methodological Notes

This analysis uses the decennial Census (1980 through 2000) and the American Community Survey (2010 and 2017). The dark green bars represent the results of the following regression: log income = age_group + recent_immigrant + recent_immigrant * year. The regression is limited to people with bachelor’s degrees who are no longer in school. Ages are in five-year groupings.

Results shown by the light green bars are further limited to employed individuals, with added controls for weeks worked, usual hours worked per week, broad occupational groupings, and the Nakao-Treas occupational prestige score provided by IPUMS. The prestige score is not available for 2018, necessitating the use of 2017 as the most recent year. Average earnings could be skewed by top- and bottom-coded income data, but regressions using median earnings produced similar patterns of results. The analysis above focused only on college graduates; among individuals with advanced degrees, the immigrant income deficit in 2017 was 14 percent before controls and 9 percent after.

Surprisingly, excluding immigrants who are likely illegal appears to have little effect on the results. The Center’s method for identifying likely illegals in Census data may not be robust to such a specialized subset of immigrants, however, so this finding is only tentative.

Source: The Income Penalty for Immigrants with College Degrees

Featured Photo by Honey Yanibel Minaya Cruz on Unsplash

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The Green Card Process Through the Lens of a DMV Visit

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As an immigration attorney, I try to provide clients with a basic, yet insightful, understanding of various aspects of a complex immigration system. It’s not always easy, but I often find analogies to something commonplace can be helpful.  One analogy I’ve found to work well to explain the green card process beyond describing its mere,

As an immigration attorney, I try to provide clients with a basic, yet insightful, understanding of various aspects of a complex immigration system. It’s not always easy, but I often find analogies to something commonplace can be helpful.  One analogy I’ve found to work well to explain the green card process beyond describing its mere sequence of form filings likens the process to a visit to a Department of Motor Vehicles (DMV) office.

In my practice area of business immigration law, green card processes are mostly employment-based and involve the successive filing of a labor certification application, immigrant petition, and adjustment of status application (with the first not always required and the latter two sometimes eligible for concurrent filing). So I’ll refer to these types of filings in describing the analogy here.  But variations of the analogy may be equally applicable to other types of green card processes, such as those in which the aspiring permanent resident will apply for an immigrant visa overseas rather than adjustment of status within the United States, as well as those based on family relationships and those available to asylees and refugees.

The trappings of a visit to the DMV, no matter the state, may be familiar to you: the issuance of a waiting number determining your place in a queue, followed by a long wait for your number to be called at one of several counters to file required paperwork, followed yet again by a lengthy wait for your paperwork to be processed, and eventually – hopefully – approved without issue.  The counter at which you’ll be called, and the length of the corresponding queue (or maybe in some fortunate instances, the absence of one altogether), often depends on specific factors, such as the type of service you’re seeking.

Just as you’re issued a waiting number upon entry into a DMV office, aspiring permanent residents are issued a priority date when the first major filing in their green card process (either the labor certification application or immigrant petition) is submitted.  The priority date is the date this first filing is submitted and determines, once the immigrant petition is approved, the aspiring permanent resident’s place in any existing queue to apply for adjustment of status.

Similar to how you wait at the DMV for your number to be called to file your paperwork at the appropriate counter, aspiring permanent residents face varying wait times for their priority date to be “called” at a designated “counter” to apply for adjustment of status.  The “counter” in the green card process at which aspiring permanent residents must apply for adjustment of status is based on a combination of two main factors: their immigrant classification (which, when speaking with clients, I refer to as their “green card category”) and their country of chargeability (which I refer to as their country of birth).  Aside from some significant exceptions outside of the employment-based green card process,[1] the law limits the supply of green cards available each fiscal year.  Because the law allocates this limited supply based on a combination of both immigrant classification and country of chargeability, queues form at “counters” where the demand for green cards exceeds the available supply.  And the more severely demand exceeds supply, the longer the queue will be. This analogy helps to show why EB-2 and EB-3 immigrants born in India and China are often confronted with waits lasting many years for their priority date to be “called” at their designated counters,[2] while EB-2 and EB-3 immigrants born in most other countries often face no such queue.  In technical terms, the existence of a queue at a given “counter” means the availability of green cards associated with that counter’s classification and chargeability combination is “retrogressed.”  If there’s no queue, green card availability at that counter is “current.”

A visit to the DMV often entails a wait of several hours sitting and keeping watch of your designated counter at it serves the visitors who arrived before you until your own number is finally called.  Likewise, many aspiring permanent residents monitor the often plodding, month-to-month movement of “cut-off dates” in the Bureau of Consular Affairs’ monthly Visa Bulletins for the designated “counter” at which they must apply for adjustment of status.[3]  The Visa Bulletin for a given month contains various charts showing whether a queue for filing an adjustment of status application exists for any classification and chargeability combination, and if so, how long the queue is.  Combinations for which there is no queue are assigned a “C” notation, indicating that green card availability is current and that the adjustment of status application can thus be filed at any time that month, including in concurrence with an immigrant petition if it has not already been approved, and assuming any prerequisite labor certification has been granted. Combinations for which there is a queue, and for which green card availability is thus retrogressed, are denoted by a “cut-off date,” with older dates reflecting longer queues.  Aspiring permanent residents seeking to adjust status at a “counter” at which green card availability is retrogressed can track their place in the queue by comparing their priority date with the applicable cut-off date each month.  Priority dates that fall before the applicable cut-off date in a given month are those that have been “called,” indicating that much like counters at which green card availability is current, an adjustment of status application can be filed at any time that month, including in concurrence with an immigrant petition if it has not already been approved, and assuming again that any prerequisite labor certification has been granted.

Like processing of paperwork filed at a counter at the DMV, processing of an adjustment of status application may take a long time.  But eventually – hopefully – the application is approved without issue.  And unlike a visit to the DMV, having qualified counsel during the green card process can make all the difference in one’s chance of success.

[1] For example, “immediate relatives” (spouses and children of US citizens, and parents of US citizens if the citizen is at least 21 years old) are exempt from annual numerical limits on green card availability. INA 201(b)(2)(A)(i).
[2] Aspiring permanent residents for whom the queue for applying for adjustment of status involves a wait of several years, such as EB-2 and EB-3 immigrants born in India and China, commonly change jobs or employers in the course of their wait. Such a change can require a restart of the green card process since employment-based green card processes are generally job and employer specific.  But to allow aspiring permanents residents who change jobs or employers to keep their place in queue, the law permits them to retain their priority date under certain conditions if they are the beneficiary of a previously approved EB-1, EB-2, or EB-3 immigrant petition, and likewise become the beneficiary of an approved EB-1, EB-2, or EB-3 immigrant petition based on their new job or employer. 8 CFR 204.5(e). 
[3] US Citizenship and Immigration Service also publishes monthly updates indicating whether to use the Visa Bulletin’s Dates for Filing charts or its Final Action Dates charts, to determine whether an adjustment of status application may be filed.

Source: The Green Card Process Through the Lens of a DMV Visit

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