Wage Mobility of Foreign-Born Workers in the United States

Seik Kim, University of Washington

This paper presents new evidence on whether foreign-born workers assimilate. While the existing literature focuses on the convergence/divergence of average wages, this study extends the analysis to the distribution of wages by looking at wage mobility. We measure the foreign-native gap in year-to-year transition probabilities from one decile group to another of a wage distribution, where the deciles are determined by a native sample. Our results, based on the matched Current Population Survey for 1996 to 2008, suggest that the majority of foreign-born workers fail to assimilate. Immigrants in middle and bottom decile groups, who are the majority of immigrants, tend to fall behind relative to natives in the same decile groups. Only those in top decile groups seem to keep up or improve relative to their native counterparts.