April 07, 2004
Immigration Impacting All—But Still Hurts
Poor More
In a recent
column, I reported recent new evidence that
immigration is now impacting the incomes of college
graduates.
I also noted a “Disappearing Middle” in the
education of immigrants. Increasingly, they are either
high school dropouts or
college grads. In 2002, for example, the proportion
of all immigrant workers who were high school graduates
was down to just two in five (40.8% - see
table 1 below).
The race of immigrant educational haves and have-nots is
strikingly different. While Hispanics and Asians account
for, respectively, 45 percent and 25.5 percent of all
foreign born workers:
Put differently, about half (47 percent) of all Hispanic
immigrants in the labor force are dropouts. Just over a
tenth (11.2 percent) are college grads.
For
Asians the numbers are reversed: over half (54
percent) are
college grads. Less than a tenth (9.3 percent) are
dropouts.
If anything, the number of
Hispanic immigrant dropouts is understated. Many are
counted as high school graduates if they completed
school in their country of origin—regardless of
standard.
The good (much-trumpeted) news: Hispanic immigrants are
more likely to
find work or to be actively looking for work than
dropouts of other ethnicities.
The labor force participation rate of immigrant Hispanic
dropouts in 2002 was 66.7 percent. That’s nearly twice
the labor force participation rate of white immigrant
dropouts (35.4 percent) and substantially above that of
Asian immigrant dropouts (46.2%).
The bad news: this exemplary work ethic
diminishes the chance that Hispanic immigrants will ever
get a High School degree or its
equivalent. Moreover, the dropout ethos is
being passed on to first- and second- generation
Hispanics, whose
dropout rates are sharply
higher than that of their counterparts in
other races. [See U.S. Department of Education,
National Center For Education Statistics,
"Status And Trends in the Education of Hispanics,"
April 2003, Supplemental Table 3.3b]
The bottom line for American workers:
Immigration is impacting the incomes of college
graduates. But immigrant dropouts are still far more of
a
drag on the market.
Figures for 2002 show that immigrants account for about
40 percent of all dropouts, but just 14.5 percent of all
college graduates. [See
Table 2 below.]
Using the rule of (college-educated
Hispanic immigrant
George Borjas’) thumb, each 10 percent increase in
immigrant workers reduces native wages by about 3.5
percent. [See “The
Labor Demand Curve Is Downward Sloping: Re-Examining The
Impact of Immigration
on the Labor Market”]
So the current immigrant influx translates to a 14
percent wage reduction for native-born American dropouts
and a 4.9 percent wage reduction for native-born
American college grads.
The
widening income gap within the U.S. may not be
caused by the rich getting richer. They are simply not
getting poor as rapidly as dropouts.
But it is increasingly clear that immigration is costing
all Americans something.
[Number fans click here
for tables.]
Edwin S. Rubenstein (email
him) is President of
ESR Research
Economic Consultants in Indianapolis.
