The Assimilation of Immigrants in the U.S. Labor Market

Employment and Labor Force Turnover

Michael E. Hurst

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781317776475
• Edition: 1
• Topic: History
• Subtopic: World History
• Index: History

This book analyzes the labor market adjustment processes of immigrants in the United States. Newly-arrived immigrants earn less, work fewer weeks, and have higher rates of unemployment than native-born workers. After a period of assimilation, these conditions later converge to, and often surpass, those of native-born workers. The adjustment process traditionally implies greater employment turnover.
Newly-arrived immigrant men have lower employment and labor force participation rates than similar native-born American men. Yet differences in unemployment rates are less consistent, and are complicated by shorter periods of unemployment duration for immigrants. Contrary to expectations, recent immigrants are less likely to be unemployed, even after adjusting for a lower duration of unemployment. This is partly because movements in and out of the labor force are high. Lower employment for recent immigrants is best explained by lower labor force participation, while higher unemployment rates are best explained by high rates of labor force entry. All labor force outcomes for immigrants, whether higher or lower upon arrival, converge to native-born norms after a few years of residence.

Chapter 10
Search Duration—Weeks Looking for Work

Chapters 8 and 9 analyzed the effects of the basic model variables and the foreign-born and YSM variables on the probabilities of being in the states of employment, unemployment, and out of the labor force, and within unemployment the probabilities of being a job loser, lob leaver, or labor force entrant. The underlying objective, however, is identifying the determinants of entering these states. The results of Chapters 8 and 9, however, only indicate determinants of the probabilities of being in the states. But if foreign-born men are less likely to be unemployed, is it because they are less likely to become unemployed, or because they spend less time in the job search process after they become unemployed? Unless we can estimate the probability of exit, we cannot make inferences about the probability of entry.

10.1 Description of Model, and Problems

Chapter 10 examines the determinants of search duration while unemployed, as measured by the time spent looking for work. The intent is to eventually use the estimates as proxies for what has been previously discussed in this book as the job finding rate, or exit rate or escape rate (Heckman and Singer, 1984), which can be considered as the inverse of the probability of continuing in unemployment once unemployed. There are several problems in making this leap, which will be discussed in this section.

The question is asked "How long have you been looking for work?" only of persons who are unemployed and looking for work Information is only available on incomplete spells of unemployment— there is no information about persons who have recently been unemployed but have already exited unemployment, or completed their spells. This aspect of the CPS data causes two important problems. First, the data are a perfect example of length-biased sampling (Salant, 1977), wherein spells of greater than average duration theoretically have a higher probability of being in the sample, since persons of less than average duration are more likely to have already exited unemployment. This would mean that, ceteris paribus, actual completed spells should be shorter than our estimates of them using only uncompleted spells. The second problem is that, on average, each uncompleted spell is only half of its expected completed spell length, a situation called interruption bias; thus completed spells should be greater than our estimates of them using uncompleted spells, by a factor of 2, but only under steady-state conditions (Sider, 1985).

A third problem arises if there is duration dependence. There is positive duration dependence if the probability of exit increases as spell length increases, which is the classical assumption of search theory—as spells lengthen, searchers lower their reservation wages, ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Figures
• Tables
• Acknowledgments
• I. Introduction
• II. Theories of Immigration
• III. Models of Labor Turnover and Unemployment
• IV. Empirical Evidence in the Literature
• V. The Theory of Immigrant Unemployment and Turnover, and Hypotheses
• VI. Data Sources
• VII. The Model, Estimating Equations, and Methodology
• VIII. Employment, Unemployment, Out of the Labor Force
• IX. Job Losers, Job Leavers, Labor Force Entrants
• X. Search Duration—Weeks Looking for Work
• XI. Adjusting Unemployment Probabilities for Duration of Unemployment
• XII. Summary, Conclusions, Policy Implications
• Notes
• Appendices
• Cited References