Rising Immigrant Wages in the United States: The Occupational Restructuring of Dual Labor Markets

• In Event: Organizations, Occupations, and Work Section Roundtables
  In Refereed Roundtable (90 minute): Table 20: Race, Migration, and Work

Abstract

By 2024, foreign-born workers comprised 18.1% of the workforce, with Latinos representing half and Asians one-quarter of this demographic (BLS, 2024). Although there is an extensive scholarship primarily examining labor outcomes through the lenses of macroeconomic shifts, demographic traits, or migration contexts, occupational structures have been overlooked by much of the literature in studying the labor market integration of immigrants. In this paper we decompose the occupation average wage growth patterns for native and foreign-born workers. We assess whether growth is parallel or converging, and whether it is progressive or shifts at specific turning points. We ask whether, for each of 416 occupations, these changes occur because of occupational reallocation or within-occupation wage gains. Our findings inform an empirical framework to understand wage growth under the dual labor market theory of migration.

Preliminary findings indicate that the occupation average wage gap between immigrant and native workers has shrunk from $7,852.81 to $427.82. Immigrants’ occupation average wages grew by about double that of natives’ between 2001 and 2023, with rapid progress occurring between 2012 and 2019, rather than a progressively over that period. While both groups benefited from occupational reallocation, immigrants relied more consistently on occupational sorting to boost their earnings.We see evidence of a transition within the dual labor market. While both groups suffered from the decline of manufacturing, immigrants have moved out of secondary sector jobs, including several in the food and service industry. Conversely, native workers saw wage declines as they reallocated away from traditional primary sector roles. Occupations with opposing trajectories (growth for one group, but decline in the other), hint at the restructuring of the occupational hierarchy. By integrating Hierarchical Bayesian Modeling to this analysis, we will address whether this restructuring results from shifting worker qualities or shifting endowments on their traits.

Authors

• Patricia van Hissenhoven Florez, University of Pennsylvania

• Xi Song, Columbia University