Language and Labor Markets: the Effect of English Language Ability on the Labor Market Outcomes of Immigrants.

Abstract

A relatively new econometric technique is applied to the analysis of the occupation and earnings of East Asian and Hispanic immigrant and native born American men. Within a discrete choice framework, a simultaneous equations polytomous logit model is used to investigate the relationship between an individual's English language ability (ELA), expected earnings within occupations, and the probability of being in any occupation. Questions about language ability inevitably lead to other questions about assimilation. Some economists hypothesize a smooth 'Americanization process' characterized by occupational and earnings mobility arising from systematized adjustments by the immigrant. How long, they ask, does it take new immigrants to acquire the average patterns of labor market behavior and economic success of comparable native born Americans? More generally, this study centers on assimilation and tests other hypotheses of the assimilation model. The analysis suggests that the expectations of assimilation are not borne out for all groups of workers. Two categorizations are valuable: ethnic identity and migration status (entry into the U.S. as an adult or child). A lack of ELA does not lower earnings nor limit job opportunities uniformly by ethnic group, migration status, or occupation. It imposes no earnings loss in the highest job categories but significantly reduces occupation specific earnings in all other occupations for Hispanics and for Asian service workers and laborers. A lack of ELA alters job opportunities. Immigrants are pushed down the occupational ladder as their facility with the language declines. Asians who do not speak English well tend to be predicted to opt out of jobs where their earnings are penalized and enter managerial work; work dominated by enclave businesses and self employment. Asians exhibit many outcomes predicted by the assimilation model but Hispanics do not. Job opportunities of adult immigrants are influenced by ethnic job structures within their local labor markets but not by the general job structure. Child migrants integrate more successfully into the general work life of the cities they inhabit. Similarly, occupational response to marginal earnings increases is uniformly weak for adult migrants but not for child migrants. Length of stay in the U.S. is not necessarily associated with occupational mobility for any group of immigrant workers.