Does human capital raise earnings for immigrants in the low-skill labor market?
We use monthly Survey of Income and Program Participation data from 1996-1999 and 2001-2003 to estimate the determinants of differentiation in intercepts and slopes for age/earnings profiles of low-skill immigrant and native male workers. Our findings provide further depth of understanding to the “mixed”picture of earnings determination in the low-skill labor market that has been reported by others. On the positive side, many immigrants are employed in similar occupations and industries as natives. Both groups show substantial wage gains over time and generally receive similar returns to years of schooling completed. Immigrants also receive substantial returns to acculturation, measured as age at arrival and English language skill. These results cast doubt on the strong version of segmented labor market theory, in which low-skill immigrants are permanently consigned to dead-end jobs with no wage appreciation. On the negative side, immigrants earn approximately 24% less than natives and
